This week during its reporting of financial results, FedEx confirmed what many have suspected, that this year’s online customer fulfillment is the busiest ever. Once more, FedEx CEO was again critical of online retailers indicating that they have dad not done a stellar job at forecasting of expected shipment volumes.
Smith was blunt: “The people that have the real problem in the e-commerce business by and large are those that view the transportation companies as some sort of utility or a vendor and they make some really dad decisions.”
While we have to assume that the FedEx senior leader is echoing the first-hand observations from his operational teams, Supply Chain Matters would add that there is often two-sides to every coin. When transportation companies continually raise rates, fees and fuel surcharges at a time when crude oil prices have reached unprecedented seven year lows, there might be a tendency to view transportation companies as being handsomely compensated to figure out and solve any network surge problems. FedEx’s latest quarterly results included a 4 percent increase in profitability.
Other notable indicators regarding this year’s holiday surge were indications from FedEx that oversized packages are accounting for a larger slice of proportional volume- nearly 10 percent of residential shipment volumes. That is an indicator that online consumers may well be taking full advantage of Free Shipping options, and that online retailers may feel the pinch when total shipping charges are analyzed and reported later.
As of today, there are but six days until the Christmas holiday. With Monday the 21st traditionally being the busiest day in terms of last-minute parcel ship volumes, the final test of networks starts now. This will also be the period when parcel carriers will supposedly enforce volume restrictions on retailers whom did not pre-plan volume in-advance.
Time will tell how events transpire and whether parcel global networks do indeed deliver all packages to expectations and how accurate retailers turned out to be in their online volume expectations.