Holiday shipping can be a hectic process for – well, nearly everyone! And the fourth quarter of 2020 is expected to be particularly challenging for everyone involved. More people than ever are going to be relying on shipping, especially online shipping, as a way to practice social distancing and avoid any potential crowds. Plus, the carriers themselves are facing difficulties with COVID-19 regulations and additional labor requirements, which means changes in their fourth-quarter services, too.
All this is creating a lot of uncertainty. We want to deal with that uncertainty directly by taking a look at what everyone can expect from carriers during the holidays, what sort of delays are likely, and what shippers and fulfillment centers can do about it.
As with all major carriers, FedEx has faced struggles during 2020, including a severe drop in operating profits, high costs for dealing with coronavirus safety measures, and rescinding any guarantees of timely deliveries. Packages have been delayed for weeks during the summer with no clear way to find out when a delivery will finally occur, and estimates show that FedEx on-time ground shipping has decreased from around 96% to 90%, one of the worst drops compared to UPS (95%) and USPS (93%).
In another move made by many companies, FedEx is also imposing high additional fees for holiday shipping from high-volume shippers. That means shipments to residential addresses could increase in cost anywhere from $1 to $5 starting in November.
The good news is that coronavirus and the general state of 2020 have given carriers like FedEx and UPS time to get used to the new situations and address logistics issues to overcome problems and shorten delays. FedEx, for example, has hired an additional 70,000 workers to help cope with the holiday season and is expanding facility operations to help prepare for upcoming demands.
FedEx is also one of the more open companies about ongoing delays and advice for those shipping in affected areas.
UPS is keeping quiet on any official news about delays or holiday shipping issues, but problems have certainly been cropping up. UPS customers throughout the summer have encountered problems where packages are delayed for weeks on end with no sign of delivery, or potentially lost entirely – with the carrier unable to guarantee where they are. While these delays can vary from center to center, similar reports are coming in from around the country. UPS has reported that as of August 2020 it was sending around 70% of packages to residential addresses, levels typical of holiday shipping at a time when the carrier was not prepared for it.
So, will UPS be prepared when the holidays really do arrive? The company is taking two key measures to prepare. The first, unfortunately, is also a large increase in shipping fees for shippers that are mailing more packages to homes during the fourth quarter. This is, frankly, a significant roadblock for shippers wanting to offer free shipping while still meeting goals, and UPS says fees could be an additional $3 for ground shipping and $4 for air shipping, deep cuts into any potential profit margins this year.
Second, UPS is working to hire 100,000 new workers to prepare for the holiday shipping. This represents a slight increase from usual shipping hires, but it remains to be seen if this will prevent any additional delays from occurring.
USPS is under additional pressure from political decisions made by the Postmaster General that have included eliminating overtime, slashing office hours, removing sorting machinery, and ordering that mail be left behind to speed up deliveries – decisions that have come at a particularly poor time for the service to manage any kind of holiday shipping.
As a result, it’s no surprise that people have been struggling to get their shipments on time, and there are reports that even vital medications are being delayed for weeks as the organization tries to deal with shifting conditions. Since, unlike other carriers, USPS isn’t doing anything to prepare for holiday shipping needs, it’s easy to predict continued delays and problems throughout the fourth quarter. The organization is also raising prices across the board for commercial shippers, but only 24 to 40 cents for most shipments, and $1.50 for Priority Mail Express.
What Can Shippers and Related Partners Do To Meet Holiday Shipping Demands?
As you can see, it’s smart to expect delays in shipping this holiday season – but what should shippers do with that information? The key, as always, is preparation, and you cannot prepare too soon for holiday demand this year. Hopefully, you have already made plans and started work on holiday shipping needs: Here are a few additional tips for reducing chaos and improving results.
- Start planning additional lead time on shipments now, especially if the delivery timeframe is very important. When delays can last weeks and capacity demands are constantly changing from lane to lane, planning far ahead is vital.
- Be pre-emptive in your communication with all recipients. Explain why delays are occurring and that certain shipments (to residential addresses, for example) are at a higher risk.
- Sign up for service notifications in your area! FedEx, for example, allows shippers to sign up to get delivery alerts, redirect notices, information on service delays, and more. The more shippers can stay on top of the location situation, the more easily they can respond.
- Always discourage or prevent people from shipping anything perishable (especially – and yes, this happens – living animals). This may be especially important over the holidays, when shipping perishable foods or pets as gifts become popular in some areas.
- Keep in close contact with any shipping partners you work with so that everyone stays updated, prepared, and connected.
Contact Sherpack to learn more about how our team is working hard to ensure your package gets fulfilled and sent to your customer in time for the holidays.