The three major U.S. parcel carriers achieved their highest on-time delivery rates for Thanksgiving week e-commerce orders since 2013, helped by infrastructure and technology investments that improved their reliability and response times, according to data published today by ShipMatrix, an affiliate of transport consultancy SJ Consulting.
UPS Inc. (NYSE:UPS) appeared to have made the biggest strides, hitting a 98.3 percent on-time mark, 10 points better than in the 2017 period, according to ShipMatrix. The performance levels were consistent across UPS’ three main product lines: Air express, deferred air, and ground parcel, ShipMatrix said.
FedEx Corp. (NYSE:FDX) scored best with a 98.9 percent on-time rate, which was also consistent across its portfolio. The U.S. Postal Service, which handles more year-round e-commerce than either of the private sector carriers—including 62 percent of traffic processed by e-tailing giant amazon.com, Inc—(NASDAQ:AMZN) achieved a 97.9 percent delivery rate during the one-week period that included the Black Friday sales bonanza, according to ShipMatrix data.
The results do not include the subsequent cyber week, which included the Cyber Monday online sales extravaganza.
Besides the improvements in physical infrastructure, the companies are reaping the fruits of artificial intelligence and machine learning investments that were leveraged to position more workers in markets with the heaviest package traffic during the week, said Satish Jindel, SJ’s founder and president.
UPS, whose large year-round daily volumes swell to massive proportions during the peak shipping season, said it is adding 5 million square feet of capacity, which includes 22 new or retrofitted automated facilities across its global system, during the period. UPS’ global network can sort an additional 400,000 packages per hour compared to last year, it said. About 85 percent of its increased sortation capacity will be in the U.S., the company said.
Atlanta-based UPS will add 300 of the familiar brown package cars this peak, and has added 9 freighters to its air fleet since last year’s holiday, it said. Many of those investments become a permanent part of the UPS infrastructure. FedEx didn’t respond to a request for comment. USPS already serves every U.S. address as part of its universal service mandate.
The peak-season delivery period, once a predictable, albeit busy, cycle, became turbulent about 5 years ago as e-commerce became a staple of the holiday season and Amazon became a change agent on the holiday landscape. UPS, in particular, struggled several years back trying to effectively calibrate supply and demand as e-commerce led to unprecedented spikes in holiday deliveries and the company adjusted to new demands on its network. In the past couple of years, however, the company appears to have managed to keep up if not stay ahead of the traffic flow.
UPS expects to average 31 million package deliveries per day during the peak period, which runs from Thanksgiving through the first week of January when an avalanche of holiday returns hit its system. The company projects average daily volume of 35 million deliveries during the peak Christmas week.