UPS, overwhelmed by online orders, warns of delivery delays

Economic Indicators Dow Jones Newswires

(Reuters)

United Parcel Service Inc. said it is taking longer than expected to deliver some packages because of an "unprecedented" surge in online orders. 

Continue Reading Below

UPS is adding one or two days in transit time on an unspecified number of deliveries following record sales around Cyber Monday, spokesman Steve Gaut said Tuesday. "We have shifted more employees and other resources to these markets to address this cyber week surge and expect to have the issue resolved by midweek, this week," Mr. Gaut said. 

The delays show that delivery networks such as UPS, which are critical components of the e-commerce boom, are still struggling to cope with the busiest shopping periods despite heavy investment to build out and automate their operations and capacity. 

The week after Thanksgiving is the start of the delivery crunch, as carriers begin to process online orders placed during the holiday weekend and millions more packages pour in, starting the following Monday. Adobe estimated that Cyber Monday sales hit $6.6 billion this year, up more than 17% from 2016. 

ShipMatrix, a software provider that analyzes shipping data, said last week that 89.2% of parcels shipped through UPS Express were delivered on the day they were promised. The worst on-time service hit packages that UPS picked up on Monday and Tuesday of last week. 

By comparison, 99.4% of FedEx express packages arrived on by the end of the day they were scheduled to arrive. 

Continue Reading Below

Mr. Gaut said UPS doesn't comment on the accuracy of third-party data. 

UPS, based in Atlanta, has notified workers at more than 100 package-delivery centers where demand is highest that it may raise the number of hours drivers work to 70 hours over an eight-day period, up from 60 over seven days. Union leadership, which represents UPS drivers, has objected to the move in areas like Boston, saying that the longer hours put package-delivery drivers at risk and keep them away from their families during the holidays. 

In a letter to UPS Chief Executive David Abney, Teamsters President James P. Hoffa said: "I fail to understand how the Company neglected to take the steps necessary to ensure that it had a sufficient number of trained workers available to meet the demand generated by the digital economy." The Teamsters represent more than 250,000 UPS workers and are currently engaged in contract talks. 

More from FOXBusiness.com...

UPS said the change complies with federal requirements and that workers are paid time-and-a-half for over eight hours a day. 

UPS expects that the "vast majority" of the 750 million packages that UPS ships between Thanksgiving and Christmas will be delivered on time, Mr. Gaut said. During that period, the company estimates that daily delivery volume will top 30 million packages on 17 of the 21 days orders are delivered. 

"UPS customers can be confident that UPS is taking the necessary steps to ensure the network operates with its customary dependable performance throughout the holiday season," he said. 

UPS tried to smooth out the volume of orders it delivers this season by adding new surcharges to packages delivered during the busiest weeks, which prompted some retailers to offer slower shipping times or use other carriers. 

What do you think?

Click the button below to comment on this article.