A deluge of mail, a historic boom in online vacation purchases and one of the biggest snow storms in the Northeast in years to overwhelm the US shipping system.
Every day, an estimated 6 million packages pile up in retailers’ warehouses or shipping centers, awaiting collection from FedEx, UPS, Amazon, the US Postal Service and other shippers. Another 3.5 million parcels are picked up daily but do not reach their destination on time, according to the latest shipping data. Things could quickly get worse: USPS on-time rates fell to just over 86% in the third week of December, from 93% three weeks ago.
That’s according to estimates from ShipMatrix, a software company that helps retailers and others track shipments and collects data on millions of packages shipped from more than 100,000 locations in the US.
“Our entire industry is under water because of the demand [for deliveries]”said Satish Jindel, president of ShipMatrix. Friday is likely to be the last day that consumers will be able to send things by regular mail so that they arrive at Christmas,” he added.
Indeed, the deadline for parcels reaching their destination using standard shipping before the Christmas holidays has probably passed for most retailers and shippers. The USPS official last day for delivery before Christmas is Friday, December 18. But even more expensive in two days, or overnight, shipping can also be nearly empty. Small business owners say FedEx is rationing shipments for retailers due to declining demand, according to Business Insider. Some have been held to a limit of 75 packets per day, it reported.
A FedEx spokesperson told CBS MoneyWatch after inquiring about retailer shipping limits that the company was “working closely with customers” ahead of the holiday season to “ensure the best possible service.” She added, “During Peak, we will continue to work regularly with customers to take advantage of our network flexibility and seven-day operation during this busy time.” The spokesman declined to say whether FedEx had imposed package limits.
The deadlock described by shipping veterans – worse this holiday season than in previous years, they said – is shortening the Christmas shopping season, frustrating consumers and retailers alike, and potentially hurting the economy and the recovery of the economy. corona pandemic seems to sputter.
Both FedEx and UPS declined to disclose how many packages are delayed in transit. A UPS spokesperson said 96% of shipments arrived on time this holiday season. But that figure includes only the packages that UPS picked up, not the packages it missed.
“This is one of the most successful shipping seasons during the holiday season as we focus on maintaining a reliable delivery network that all our customers can rely on,” a UPS spokesperson said in an emailed statement.
“Data provided by outside consultants can vary widely based on the specific markets, customers and shipping routes they choose for their analysis,” said the FedEx spokesperson. She also said the company’s role in helping distribute the Pfizer-BioNTech vaccine will not affect regular shipments, noting that the company uses a separate fleet of trucks and planes for that.
“As mentioned earlier, we continue to work closely with our customers to manage their volume and ensure we provide the best possible service,” said the FedEx spokesperson.
‘Waiting for the refund request’
A number of retailers say they are experiencing shipping delays. Earlier this month, Victoria’s Secret owner L Brands warned investors in a filing with the US Securities and Exchange Commission that “additional restrictions” in transportation capacity during the holiday season could hurt sales. On December 15, Etsy also updated the shipping deadlines for its retailers, asking them to add the dates to their product description pages.
Arlene Marie Mathews, a Milford, Pennsylvania-based seller who sells bath and aromatherapy lotions on Etsy and typically ships through the postal service, said customers have been experiencing delays since late November and some orders have been delayed by as much as two weeks. On December 16, she updated her product page on Etsy to warn that orders can arrive up to 10 business days late.
“I am currently inundated with messages from customers asking where their packages are. Some are understanding, some are not,” Mathews told CBS MoneyWatch. “I’m waiting for the refund request messages to flood my inbox at any time.”
Etsy said it allows sellers to flag negative reviews from customers who only complain about shipping issues for removal. A spokesperson for the e-commerce company said it has “dynamically adjusted estimated delivery dates” on its website to provide buyers with the latest information.
“We know the holidays are an incredibly important time for the 3.7 million creative entrepreneurs who sell on Etsy,” the spokesperson said in a statement. “To address shipping delays in the US, we focus on supporting merchants by making the most current information available.”
Olive & Cocoa, an online gift basket merchant in Salt Lake City, Utah, is warning customers of potential delays and shipping options running low. December 16 was the last day the website said it could send orders with standard shipping for delivery by Christmas. Subsequent orders will not arrive until December 29. Two-day shipping is not available on the website until January, although slots remain for faster – and more expensive – deliveries.
“Olive & Cocoa recognizes that the entire shipping system is overloaded,” said a spokesman. “We work closely with our shipping partners to provide our customers with the best possible information on shipping availability and timelines, and to ensure that Christmas gifts ordered from Olive & Cocoa are delivered in a manner consistent with our high customer service. “
“They have no idea where it is”
The delays during the holidays are a headache for consumers. Christine and Bruce Merevick of Chicago cannot see their family in Alabama for Christmas because he is undergoing chemotherapy and is considered to be at high risk for COVID-19. Their frustration increases: the Merevicks’ holiday package, which they sent with priority and insurance at the beginning of December, has still not arrived. They filed a claim but were told to return in two weeks.
“It’s just really frustrating,” Christine Merevick told CBS Chicago’s Tara Molina. “They have no idea where it is.”
CBS News correspondent Janet Shamlian reported this week that FedEx and UPS have told some retailers that they will not pick up additional packages beyond their previous commitments before retailers saw a spike in orders. That has led to more orders being sent to the postal service, adding to the postal delays that began this summer ahead of the November elections. Earlier this week, the USPS in a public statement encouraged customers to send their Christmas gifts and cards “as soon as possible.”
Even for the holidays, shipping delays were a problem during the pandemic, which prompted some consumers to order more online and avoid in-person shopping. FedEx and UPS began hiring as early as November to be ready for the projected increase in deliveries, with a total of 170,000 employees for the season. But those problems are now pervading many people’s holidays.
“It was not possible for shippers to be ready,” said ShipMatrix’s Jindel. “It would have taken two or three years to be ready for this year’s high demand.”