United Parcel Service expects delays in mid-week package deliveries after an increase in e-commerce sales flooded its network after Thanksgiving.
Orders online on Cyber Monday and days after overwhelmed expectations, Steve Gaut, causing a "bubble" to develop in certain package centers. The heavy volumes forced delays of one or two days for certain items ordered last week. The company worked over the weekend to catch up.
Much of the portfolio has already been erased, and UPS does not expect to miss the Christmas deadlines because of that, Gaut said.
"The bubble broke through the system, and we expect everything to be in line with our forecasts for tomorrow," said Gaut.
UPS has been preparing for months to handle the increase in deliveries during the peak holiday season by implementing a 27 cents surcharge for the first time in packages shipped to residences in the United States during certain weeks. The company also expects to add 95,000 temporary workers.
The increase in purchases led the company to notify many of its drivers that they would be required to work up to 70 hours over an eight-day period, Gaut said. Sixty hours during a seven-day period is more typical during the peak season. Drivers are entitled to a prolonged rest after that period.
The International Brotherhood of Teamsters said UPS made that move without first consulting the local unions that represented the employees.
"After all, this is the third year in a row that Cyber Monday purchases have exceeded the company's ability to deliver holiday packages," Teamsters CEO James Hoffa wrote in a statement. letter to UPS CEO David Abney.
UPS implemented the 70-hour temporary work week for eight days in the past, although it is using it more widely around its network this year, Gaut said. The Wall Street Journal previously reported delays at UPS based in Atlanta.
The express unit of the courier service delivered 89 percent of the packages at the end of the scheduled delivery day between November 27 and December 2, compared to a 99-percent punctuality at FedEx Corp ., according to ShipMatrix Inc., a data provider that tracks the performance of shippers.
UPS's weekly Cyber Monday performance was at least 95 percent in the previous four years, according to ShipMatrix. The survey only measures Express UPS deliveries and does not measure its much larger land unit.
Gaut refused to make internal UPS statistics available.
UPS delivers almost twice the volume of packages during the high season than FedEx. UPS expects to deliver 750 million packages worldwide during the peak season, compared to up to 400 million in FedEx, according to the forecasts of each company. FedEx alerted customers that Monday night's storms at its airline hub in Memphis, Tennessee interrupted sorting and flight operations and could delay some shipments on Tuesday.
"FedEx is proud of the excellent service we have been able to provide during the first week of the peak holiday season," the company said by email. FedEx is "well positioned" to meet the expected record demand, he said.