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UPS, overwhelmed by online orders, warns of some delays in delivery – Update

United Parcel Service Inc. is struggling to handle the increased shipments of online shoppers, which causes delays in delivery at the start of the holiday season and causes the operator to drive drivers to work overtime .

UPS, which handles deliveries to many of the largest retailers, including Amazon.com Inc., Wal-Mart Stores Inc. and Macy's Inc., adds one or two days in transit at a Unspecified number of deliveries after record sales around Cyber ​​Monday, spokesman Steve Gaut said on Tuesday.

"We have changed more employees and other resources to these markets to cope with this increase in the cyber week and we hope to have the problem solved midweek, this week," Gaut said.

Delays show that distribution networks, such as UPS, which are critical components of the e-commerce boom, are still struggling to cope with periods of increased commercial activity despite heavy investment to build and automate their operations and capacity. For the first time this year, UPS tried to manage the flow of packages by adding surcharges to deliveries during peak periods.

The week after Thanksgiving is the beginning of the contraction of delivery, as operators begin to process online orders made during the holiday weekend and millions of additional packages enter the following Monday . Adobe estimated that Cyber ​​Monday sales reached 6.6 billion dollars this year, more than 17% since 2016.

ShipMatrix, a software provider that analyzes the shipping data, said that 89.2% of shipments sent last week through UPS Express were promised The worst punctual service came to the packages that UPS picked up on Monday and Tuesday of last week.

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Mr. Gaut said UPS does not comment on the accuracy of third-party data. UPS expects the "vast majority" of the 750 million packages it ships between Thanksgiving and Christmas will be delivered on time, he added.

FedEx Corp. is "well positioned" to meet record demand during the peak season, when it plans to deliver up to 400 million packages, said spokesman Glen Brandow. "We plan and collaborate closely with our clients throughout the year and design our networks to be prepared to face the significant increase in demand for residential deliveries," said Brandow.

The US Postal Service UU., Which offers more online orders to residences than anyone, is extending delivery times to handle the volume of the high season, with packages delivered early in the morning, in the afternoon and on Sundays.

"We have planned for this holiday season throughout the year and we have flexed the network and extended the delivery times to accommodate a larger volume," said spokesman David Partenheimer.

UPS, based in Atlanta, is making some adjustments to deal with. It has notified workers in more than 100 package delivery centers where the demand is higher that it can raise the number of hours that drivers work to 70 hours in a period of eight days, compared to 60 in seven days.

The union leadership, representing UPS drivers, has opposed the move in some places, saying that the increased number of hours puts parcel delivery drivers at risk and keeps them away from their families during the vacations.

In a letter sent to UPS Chief Executive David Abney on Monday, Teamsters President James P. Hoffa said: "I do not understand how the company forgot to take the necessary steps to make sure I had a number enough skilled 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 contractual conversations.

UPS said the change meets federal requirements and that workers are paid a half and a half of more than eight hours per day.

"UPS customers can trust that UPS is taking the necessary steps to ensure that the network operates with its usual reliable performance during the holiday season," said Gaut.

UPS has spent billions of dollars to add more storage space and automate sort centers, where packages are ordered before being shipped to carriers to reduce shipping time. He has also worked more closely with large retailers to avoid the problems of previous holiday seasons. In 2013, for example, UPS was overwhelmed by an unexpected excess of last minute packages in the days leading up to Christmas and many buyers did not receive their orders on time.

This year, UPS added three Boeing 747-8, the largest commercially available cargo aircraft for its fleet, to help during the peak season. He also said he would hire 95,000 seasonal workers and even let some of them drive their own cars to deliver packages.

In October, Mr. Abney, the CEO of UPS, told investors that the company was "well positioned to have a successful high season, both from the point of view of customers and from the point of view of We've been working a long time on this, and I think there's a lot of confidence in the whole group. "

Write Paul Ziobro to Paul.Ziobro@wsj.com

(FINAL) Dow Jones Newswires

December 5, 2017 at 4:45 p.m. (21:45 GMT)

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