Is holiday trouble looming for UPS deliveries?

Dec 11, 2015 3:54 PM by CBS News

Some customers of the United Parcel Service (UPS) can't be blamed for feeling Grinchy.

On-time delivery rates for the company plunged last week, with about 91 percent of UPS ground packages delivered on time, according to software developer ShipMatrix. At the same time a year earlier, UPS' on-time deliveries were tracking at about 97 percent, ShipMatrix told CBS MoneyWatch. FedEx's deliveries have also seen some delays, with last week's packages having a 95 percent on-time rate.

The decline in on-time deliveries may bring up less-than-sweet memories of a Christmas past. In 2013, both UPS and FedEx scrambled to delivery holiday packages on time, leaving some gift-givers with empty hands on Christmas morning. At that time, the companies blamed bad winter weather and a surge in last-minute online shopping, and they pledged to improve their service.

With Twitter users now launching a flurry of complaints about late UPS deliveries, it begs the question of whether this holiday season will turn into a repeat of 2013.

"Really, UPS? Out for delivery still? It's kind of late," one Twitter user wrote at 11:30 p.m. on Monday.

Since the holidays are the busiest weeks for retailers and delivery services, companies bulk up on seasonal hiring each fall. This year, Amazon (AMZN) hired 100,000 people for the holidays, while FedEx hired 55,000 seasonal workers and UPS said it would hire as many as 95,000, about on par with a year earlier.

The problem may reside in UPS' pledge to keep seasonal hiring stable, given that online holiday shopping is growing even faster than experts had forecast. Consumers spent $3.07 billion online on Cyber Monday, an increase of 16 percent from a year earlier, according to Adobe Systems. That was 3.2 percent higher than Adobe had predicted.

But in other respects, this holiday season has been kind to delivery companies, given the warmer than normal temperatures across much of the U.S.

For its part, UPS said that the "vast majority of UPS customers have received their shipment on time." The company added that the network is running according to plan, although some areas were hit with volume "at levels greater than the original peak plan for those locations."

"Our operations effectively reacted to higher than expected volumes and this will continue as we progress through our peak shipping period," a spokesman wrote in an email. He said the company is continuing to hire seasonal workers.

It may be too early to say if problems will continue as Christmas approaches, said ShipMatrix research analyst Mark D'Amico. He noted, "It could be something they could get corrected in time."


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