Despite months and months of pre-planning, for every year-end holiday surge period, there always seems to be the few scapegoat logistics providers or retailers along the customer value-chain that endures the most scorn regarding expected vs. actual performance. This year, the first recipient in the barrel is likely UPS.
Today’s edition of The Wall Street Journal reported (Paid subscription required) what many industry supply chain teams most feared, that UPS’s network suffered a bottleneck because of the Black Friday- Cyber Monday surge of online orders.
The report indicates that the surge of parcel volume has led to a reported 1-2 days in added transit times on an unspecified number of expected deliveries. Keep in mind that UPS tends to extend expected delivery times during the current period, and thus the bottlenecks are likely longer than just 1-2 days. The WSJ cites data from ShipMatrix indicating that 89.2 percent of parcels shipped last week via UPS Express were delivered on the day they were promised. Comparison data indicated that FedEx Express packages had a 99.4 percent performance with the day promised.
According to the Journal report, UPS has notified workers at more than 100 delivery centers where demand is highest that it may raise driver hours to 70 hours over an eight-day period. That is an increase from the current 60 hours over a seven-day period. The carrier’s labor union has taken some exception to such a move arguing that the added hours places drivers at increased risk. For its part, a spokesperson indicated to the WSJ that customers can be assured that the right steps are being taken to ensure the network operates with its customary “dependable performance.”
What makes this news especially troubling for retail teams is the reality that UPS imposed a new holiday surcharge on all packages shipped during this same period. The reasoning was to compensate for added network capacity and resources and to incent retailers to promote merchandise earlier or offer more extended, slower shipment offers to lessen volumes.
But alas now, the carrier has a bit of egg on the face and could potentially face some select request for refunds on such surcharges. But alas, there are still 18 online and in-store shopping days remaining until the Christmas holiday.
Who knows which customer fulfillment partner will be the next to be scorned.
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