2018 Holiday Logistics Guide

holiday logisticsBlack Friday, Cyber Monday, and Giving Tuesday are in the books, and we are in the full swing of the holiday shopping, and shipping, season. Over the years, as e-commerce has grown and retailers are shipping more packages than ever before, holiday logistics has become a make or break area for these companies. The nightmare of 2013, and the roughly two million packages that were delivered late, still looms large in the minds of retailers, carriers, and customers. So let’s check in to see how some of the largest logistics providers and retailers are preparing for this season.

UPS is projecting it will deliver roughly 750 million packages this holiday season, which is a five percent increase over 2017. That is a lot of holiday logistics to think about. So how is UPS getting ready? The company is investing in people and infrastructure to handle the holiday volume. The company is hiring 100,000 seasonal workers this season, which is an increase of 5 percent from last year. These positions are primarily package handlers, drivers, and driver-helpers. UPS has said that over the last 3 years, nearly 35 percent of seasonal employees have become full-time employees. UPS is also investing in seven new “super hub” automated sortation facilities to speed up the shipping process. Last year’s surge in e-commerce resulted in an additional $125 million in costs for UPS. To temper those costs, the company has announced a number of holiday surcharges, including $26.20 for large packages, $165 for packages over maximum limits, and $3.15 for additional handling. UPS is also tacking on a roughly $1 surcharge on all deliveries during the season. Shipping deadlines for UPS are December 18 for UPS 3 Day Select, December 20 for UPS 2nd Day Air, and December 21 for UPS Next Day Air.

Not to be outdone, FedEx is also investing in people and technology to get ready for its estimated 400 million deliveries this holiday season. The company is hiring 55,000 workers this holiday season, a 10 percent increase over 2017. Additionally, FedEx will increase hours for some of its existing employees. FedEx is also investing money in its infrastructure to build more capacity for the holiday season. The company is investing more to handle the growing number of deliveries for online purchases and other packages, including the installation of robots and other automated equipment intended to boost capacity. On top of that, FedEx is expanding its US ground-shipping operations to six or seven days per week for the shopping season, depending on the market. While FedEx is not adding surcharges to all holiday deliveries, it is implementing surcharges of $27.50 for oversize packages, $150 for ground unauthorized packages, and $3.20 for additional handling. FedEx’s shipping deadlines are December 10 for FedEx SmartPost, December 17 for FedEx Home Delivery and FedEx Ground, December 19 for FedEx Express, December 20 for FedEx 2Day and FedEx 2Day A.M., and December 21 for FedEx Standard Overnight, FedEx Priority Overnight and FedEx First Overnight.

The Postal Service expects to deliver nearly 15 billion pieces of mail and 900 million packages, for a total of nearly 16 billion this holiday season. The 900 million packages is a nearly 20 percent increase over last year. To get ready for the rush, the USPS is keeping its seasonal hires similar to last year’s number of 35,000, which includes mail handlers, holiday clerk assistants, and mail processing clerks. All of these jobs start with pay of at least $16 hour. The Postal Service expanded its Sunday delivery operations to locations with high package volumes beginning November 25 and will continue this service throughout December. Like last year, the USPS is encouraging customers to take advantage of their Click and Ship options to order boxes and shipping labels online and schedule next day package pick-up. USPS shipping deadlines include December 20 for First-Class Mail, packages, and Priority Mail, and December 22 for Priority Mail Express.

Amazon is going in the opposite direction when it comes to holiday hiring. The online giant is hiring 100,000 workers this season, which is 20,000 less than last year. Instead, Amazon is turning to automation within its fulfillment centers to handle the increase in holiday packages. As the company continues to move away from its reliance on UPS, FedEx, and the USPS for deliveries, Amazon is hiring its own drivers for last mile deliveries for the first time ever. In another first for Amazon, it is eliminating its minimum order threshold for free deliveries. The company will offer free deliveries on all orders for all customers this holiday season, up until the point it can guarantee delivery before Christmas. Amazon indicated that a typical free delivery takes 5 to 8 business days.

A few other retailers are shaking things up in preparation for the holiday season. Walmart is going the opposite direction from Amazon when it comes to free deliveries. The retail behemoth is keeping with its policy of free shipping on orders over $35. Additionally, it will not be hiring a whole lot of seasonal workers. Instead, Walmart will offer more hours to its current full and part-time employees. The other big announcement from Walmart is a program to make online returns easier in the store. This includes items from third party sellers on e-commerce marketplaces.

Target is hiring 127,500 seasonal workers, with 7,500 of those dedicated to its fulfillment centers. Target is also offering free shipping on all online purchases up until December 22. At that point, regular shipping rates apply. Macy’s is hiring 80,000 seasonal workers. Of that number, 23,500 will be dedicated to fulfilling e-commerce orders at fulfillment centers and in stores. This is an increase of 30 percent over last year for its e-commerce fulfillment staffing.

In all, total holiday spending this year is expected to top $1.1 trillion, which is an increase of more than 5 percent over 2017. With e-commerce continuing to become a bigger percentage of total sales, UPS, FedEx, and the USPS are taking steps to ensure a seamless holiday shipping experience. This includes hiring close to 200,000 seasonal workers to sort packages and make deliveries. These companies are also investing in infrastructure to speed up the process. We’ll take a look back in early 2019 to see how companies handled the holiday logistics puzzle.

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