Rather than risk their systems becoming clogged with packages, both FedEx and UPS UPS -1.06%
keep a harder line by enforcing a preset limit on the daily number of packets they will pick up. The policy is creating backlogs in some of the shippers’ warehouses, which both retailers and Costco Wholesale Corp. to small and medium businesses.
Richard Galanti, Costco’s chief financial officer, said that sometimes UPS and FedEx do not pick up all the packages the retailer wants to ship, causing delays. “We, like others, are thinking of other things to do, not on a grand scale,” he said. Costco recently started using Instacart to create items like Apple Inc. Send AirPods and Instant Pots for same-day delivery, rather than just offering groceries through that service.
For example, an order placed at Costco on Black Friday showed it was ready for next-day shipping, according to tracking data reviewed by The Wall Street Journal. However, it didn’t reach a UPS facility for 13 days because it was in limbo in California. The order would reach its destination in New York three days later, within the shipping time provided by UPS, but 18 days after the order.
Mr. Galanti said that while there are some delays, Costco delivers about 90% of the time within the time frame promised on its website.
A UPS spokesperson said the carrier will “pick up and deliver the planned volume” and its on-time performance has led the industry since early October. “We adhere closely to the cooperation plans that we have mutually agreed with our customers, and we always strive for reliable service,” he said.
Examples such as the Black Friday order show that while packages take longer to arrive, FedEx and UPS can achieve delivery scores better than a year ago, despite record high package volumes and other pandemic-related challenges such as employee.
“While this can help carriers maintain service standards, retailers are becoming frustrated as they look for alternatives to delivery,” said Trevor Outman, co-chief executive of shipping consulting firm Shipware LLC.
For the two weeks between November 22 and December 5, on-time scores were 94.9% for FedEx, 96.3% for UPS and 92.8% for the US Postal Service, according to ShipMatrix, a software provider that analyzes shipping data. All were better than last year during a similar period, including Black Friday and Cyber Monday.
ShipMatrix president Satish Jindel said 2.5 million parcels take an extra day or two to be delivered, advising shoppers to order items by December 15 to receive them at Christmas without paying higher shipping charges. Some retailers are also warning shoppers of delivery delays and to order before that date or earlier to ensure they arrive by Christmas.
FedEx and UPS, in addition to network upgrades and hiring tens of thousands of employees, have spent months planning shipping forecasting with their major customers, and the carriers have assigned companies certain amounts of packages per day or week. If shippers exceed that number, carriers will pause pickup until the network can handle more.
“In recent years, the carriers took every package available to them, hoping they could get it through their system,” said James Thibault, who worked at UPS for 30 years before joining Intelligent Audit, a freight audit and analysis company. . “This year is a marked change.”
ships the “vast majority” of packages within the delivery windows that shoppers see when they order, and the promised shipping times are in line with previous holiday seasons, a spokeswoman said. In a small number of cases, the retailer eases the burden on carriers by only making some items available for same-day delivery or collection, which use other delivery methods, she said. Target has not set a general cut-off date for packages due to arrive at Christmas, instead showing the cut-off date for each item online, she said.
Several major retailers, including Gap Inc.
and Macy’s Inc.,
faced temporary restrictions on sending volumes shortly after Thanksgiving. Other shippers say they have been cut without notice.
Deliveries poured into goTRG by the thousands in the days following Thanksgiving. Owned by the Recon Group LLP, the company processes returns for major retailers and then resells electronics, sporting goods and other items through a variety of websites, including Walmart.com, eBay, and Amazon.com..
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In four of the warehouses, an average of 2,500 were ordered a day, until FedEx put the brakes on. The carrier told the company on December 2 that it would only pick up 200 orders per day until further notice.
“We were never notified in advance” of shipping limits, said David Malka, goTRG’s chief sales officer. “We were told afterwards.”
The boxes piled up on the company’s loading dock. At a warehouse in Kentucky, goTRG has stopped shipping with FedEx and is considering relabeling several thousand packages awaiting shipment with other carriers.
A FedEx spokesperson said the company has been working with customers to understand the expected shipping volume, but that the volume is significantly higher than expected in some cases. “We know how important it is to our customers to have their parcels delivered on time, and we remain committed to working with them on ways to leverage our network flexibility,” said the spokesperson.
Wally Nowinski, chief marketing officer for Collage.com Inc., which makes custom products, said that UPS has skipped pickups twice in recent weeks for its Mail Innovations service, a cheaper shipping option that the postal service uses for last-mile -deliveries. . The skipped pick-ups left 50 pallets of items on the loading dock and extended delivery times for customers.
“We work very hard to keep the fabrication part as tight as possible, so it’s not something we did that makes the package last longer,” said Mr. Nowinski. “But we are dealing with disappointed customers.”
The Postal Service acknowledged on Monday that record high shipping volumes, staff shortages due to the coronavirus, and insufficient space on planes and trucks have led to temporary delays, and encouraged everyone to ship their packages early.
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