FedEx Says Some Shipments Delayed Past Christmas Eve
26 December 2015 - 9:00AM
Dow Jones News
By Laura Stevens
Unable to deliver all its packages in time for Christmas, FedEx
Corp. said drivers were working extra shifts Friday to help the
company manage a surge in online shopping as well as severe weather
during one of the busiest weeks of its year.
"FedEx Express continues to run limited delivery operations in
some markets to deliver shipments that couldn't be delivered before
Christmas due to unforeseen volume and severe weather in some areas
of the country, " a FedEx spokeswoman said Friday afternoon. She
declined to say how many packages were delayed.
FedEx's major air hub is located in Memphis, Tenn., an area that
was affected by storms in the days before Christmas. Even before
the poor weather, some retailers had warned shoppers that FedEx's
network was experiencing widespread delays.
"It does appear FedEx is having issues," said John Haber, chief
executive of Spend Management Experts, a supply-chain consultancy
that works with retailers. "I think the e-commerce volumes were
just too much, and they just couldn't process all the volume."
On Thursday, FedEx said it was operating with slight delays and
making some operational changes due to weather. The spokeswoman
said Friday that Express employees had volunteered to work extra
shifts on Christmas to help get packages to customers. FedEx also
opened some offices on Christmas so customers could pick up
packages. The company has made Christmas deliveries in the past six
years.
It was unclear how widespread the FedEx delays were, but a
number of unhappy consumers took to Twitter and other social-media
outlets to complain.
Both FedEx and rival United Parcel Service Inc. had been working
to avoid a repeat of the 2013 holidays, when online shoppers
flooded their networks with an unexpected surge of last-minute
packages and not all of them made it on time. FedEx had forecast
more than 317 million deliveries between Black Friday and Christmas
Eve, an increase of 12% from last year. UPS predicted it would
handle more than 630 million deliveries during its season, up more
than 10% from last year.
UPS, whose biggest air hub is in Louisville, Ky., said Thursday
it wasn't affected by the weather and that operations were running
smoothly. UPS "will be working into the evening to get everything
delivered" Christmas Eve, a spokesman said. UPS didn't immediately
respond to requests for comment on Friday.
Consultants who work with shippers pointed to delays with
FedEx's lowest-priced product, where it hands off the package for
final delivery to the U.S. Postal Service, saying FedEx had not
picked up some trailers full of packages. But only FedEx air
packages are guaranteed for delivery if shipped this week, which
could be causing some customer confusion.
FedEx's guaranteed Express packages, which typically operate as
high as 99% on time, appeared to experience higher-than-usual
delays this week, said Satish Jindel, a parcel-industry analyst
with SJ Consulting Group Inc. Even if the company's on-time rate
falls by a couple of percentage points, that "still is a pretty
large number of packages," he added.
Delivery companies have reported that holiday package volumes
have been even higher than expected as more shoppers buy presents
online. Networks were strained and there were some delays in early
December following heavy online shopping over the Thanksgiving
weekend and on Cyber Monday.
Last week, FedEx executives said it was the company's busiest
peak season ever, and they didn't expect things to slow down before
Christmas. The company was also capping retailers who exceeded
their volume forecasts.
E-commerce sales rose 11.8% from Nov. 26 through Dec. 20
compared with a year ago, according to ChannelAdvisor Corp., which
makes e-commerce software and measures online transactions. All
combined, FedEx, UPS and the U.S. Postal Service forecast more than
1.5 billion package deliveries during the holidays.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
December 25, 2015 16:45 ET (21:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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