Deliberate delays help UPS deliver on time for the holidays

By telling customers up front that package delivery on its two- and three-day shipping services would take an extra day to deliver during the week of Christmas, UPS may have saved itself a huge headache this holiday season.    UPS may have saved itself a huge headache this holiday season by warning customers ahead of time about planned delays during the week of Christmas.
   The parcel giant told customers in its holiday service schedule released in October package delivery on its two- and three-day shipping services would take an extra day to deliver during the busy holiday week.
   This was the first time UPS had ever utilized this particular strategy of deliberately delaying certain shipments to avoid further backups, and according to company officials, it worked brilliantly.
   “That was a real key to our success the week of Christmas,” UPS Chief Executive David Abney told the Wall Street Journal in an interview.
   UPS spokesman Steve Gaut said shipments actually requiring the additional day for delivery only represented a minute portion of those involved in the pilot planning program.
   “These extensions gave UPS additional flexibility to change shipping modes to deal with weather or other issues, without operating outside the contract,” said Gaut.
   The company said it also refused some last-minute delivery orders in order to avoid potential delays.
   “You really don’t make anyone really happy if you take a lot of last-minute packages, and then you don’t get them delivered,” said Abney.
   UPS’s archrival FedEx wasn’t as successful in executing their final holiday push, as winter storms affecting operations at its Memphis, Tenn. hub and record online orders caused the company to have to scramble to finish deliveries on Christmas day.
   The successful holiday season also follows two troubled years at UPS. In 2013, the company struggled to handle a last-minute surge of orders, which caused them to overcompensate in 2014, deploying excess capacity that ended up going unused and costing UPS an additional $200 million beyond budget expectations.