Major Shippers—And Amazon—Can’t Seem to Keep Up With E-Commerce Demands This Holiday Season

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Photo credit: UPS

The e-commerce juggernaut is proving to be quite challenging for shippers and suppliers this holiday season, with more than two weeks to go.

UPS told Sourcing Journal on Thursday it is “continuing to experience peak volumes well in excess of normal average daily package volume,” adding that “any reported delays are temporary as the network continues to adapt to handle strong peak demand.”

Kim Krebs, media relations manager, said, “Our operations have returned to the normal peak operating plan after the initial cyber week surge. The vast majority of the 750 million packages UPS ships during this holiday season will be delivered in accordance with the service commitments for the specified time-in-transit.”

Krebs said 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.” She added that through a combination of new capacity and seasonal hiring, UPS expects to process nearly double the normal average daily volume of more than 19 million packages and documents during the holiday peak weeks.

This year’s forecasted volume is about 5 percent more than 2016’s holiday volume of more than 712 million packages, or about 40 million additional boxes to deliver.

The update from UPS comes amid media reports about shipping delays for online orders from companies like Amazon and Walmart. Amazon accounted for about half of all online transactions on both Black Friday and Thanksgiving Day, but customers have reported their two-day Prime deliveries missing estimates by up to a week, Racked reported.

[Read more about e-commerce logistics: DHL Expands Capacity and Logistics to Meet E-Commerce Fulfillment Demands]

Racked also noted that a scan of Twitter shows that other brands like ASOS, Yoox, Fashion Nova and Ssense are dealing with warehouse delays and a backlog of customer-service complaints. Zara has also been behind schedule on its deliveries, even offering expectant consumers free shipping on their next orders as a concession.

Walmart Stores told the Business of Fashion that soaring online purchases have caused delays in its distribution network.

“The week of Thanksgiving is an incredibly busy time for all of retail with massive volume going through our system, there were some orders that took extra time, much like other major e-commerce sites,” a Walmart spokeswoman said. “A vast majority of orders are shipping on time now.”

The latest U.S. Labor Department reported last month that data on sector employment shows a continued shift in retail jobs from brick-and-mortar stores to online shopping.

Retail industry employment declined by 18,000 jobs in October, while employment in the transportation and warehousing sector rose by 8,400 jobs from September.

The rapid rise of e-commerce saw warehouse operators, parcel carriers and other transportation firms add workers last month to handle the increased flow of goods for the holiday shopping season.

Courier and messenger firms added about 5,700 jobs in October, continuing a six-month expansion, as big employers like UPS and FedEx Corp. ramped up seasonal hiring. UPS hired 95,000 extra workers this season to deal with the holiday surge. Amazon hired 120,000.

DHL said at a press conference last week that it will hire about 6,000 additional seasonal workers across its four business units in North America to support its contract logistics, fulfillment, freight transportation and express delivery operations in December.

The company also said it’s introducing upgrades to its service capabilities, including additional flights, new customer applications and piloting new warehousing technologies that leverage robotics and augmented reality to increase productivity to meet increased demand from B2B and B2C e-commerce.

Travis Cobb, senior vice president of network operations for DHL Express, said peak season pickup and delivery volumes are forecast to be 26 percent higher year over year, and his unit is expanding weekend deliveries and adding to its courier network.

“We’re also expanding intercontinental aircraft capacity and facilities in major trade lanes,” Cobb said. “We also have a continued focus on improving last-mile delivery with more pick up and drop off locations, such as retail lockers and new retail locations.”

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