UPS Isn't Taking Any Chances This Holiday Season
Consumers remember all too well the shipping fiasco that left them giftless last year during the holidays. Nearly 2 million UPS and FedEx packages in the United States arrived after Christmas Day. On Monday, UPS announced its plan to ensure history doesn't repeat itself.
While UPS's close collaboration with multiple retailers to avoid a repeat of last year should result in a smoother holiday season, the parcel carrier isn't taking any chances. It's putting retailers on notice. UPS announced it would charge extra or even refuse packages if last-minute sales by retailers threaten the company's system.
"With the changes we've made, I feel very comfortable about peak (season) this year," UPS CEO David Abney told Reuters.
At the risk of turning away customers, UPS feels imposing new charges or refusing sales is "the exception to the rule," said Abney. While not an ideal situation, UPS hopes the new guidelines will encourage consumers to shop earlier. To help improve the process, UPS has put in place a "control tower" system to help manage the flow of packages and find possible problems.
It's critical this holiday season goes well for not only UPS, but also FedEx and the USPS. Since 2009, peak-day package volumes during the holiday season have grown 40 percent, and they don't figure to be slowing down anytime soon. U.S. e-commerce sales are forecast to grow 16 percent this holiday season.
Abney believes retailers are holding "Black Friday" sales earlier this year to help more evenly distribute the pre-Christmas order volume. When asked about a possible e-commerce surge raising costs for UPS, Abney replied, "We certainly in 2015 and beyond will look very closely at what we need to do" to offset those costs.