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UPS expects surge in holiday returns traffic

Company sees double-digit gains in returns volume for current week

UPS Inc. (NYSE:UPS) said Thursday that it expects returns traffic to rise 23% by week’s end compared to the highest-volume returns period during the 2019 peak-season cycle, a legacy of an unprecedented peak season and a reflection of the abundance of returns options available to merchants and consumers.

The Atlanta-based company said it expects to handle 8.75 million returns parcels this week. Strikingly, returns volumes are expected to be evenly distributed throughout the week instead of concentrated on one or two days, UPS said. As a result, the company expects 1.75 million returns will have entered its system each weekday through the close of business on Friday. 

Returns traffic is expected to remain elevated into next week, UPS said.

The COVID-19 pandemic, which dramatically altered consumer buying habits as more Americans ordered online rather than go to stores, had the same impact on returns, according to data from reverse logistics specialist Optoro that was cited by UPS. Before the pandemic, two-thirds of consumers surveyed by Optoro preferred store returns, and only one-third scheduled their returns with a shipping company. However, by October, seven months into the pandemic’s arrival in the U.S., about 60% of consumers surveyed were using shipping firms to return their goods.

“With the rise of e-commerce, returns are becoming a more consequential factor in a consumer’s decision about where to spend their dollars, and we’re seeing more consumers checking return policies and options before they even make a purchase,” said Tobin Moore, co-founder and CEO of Optoro, in comments cited by UPS.

UPS offers its merchant customers four different products to help manage their returns traffic. In addition, UPS has more than 20,000 “Access Point” locations that will accept returns from consignees.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes UPS (No. 2).

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.