Holidays and Distribution Challenges in 2020

Are you struggling to get deliveries to customers this December?

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The perfect storm of 2020 is expected to produce the highest amount of packages being delivered this holiday season. Careful planning and supplier collaboration are likely going to help meet the staggering demand.

FedEx, United Parcel Service and the US Postal Service are handling a record number of shipments because of a huge increase in online purchases during the Covid-19 pandemic. The delivery companies have been preparing for this record season with e-commerce spending in the quarter ended in September up 37% from last year, with similar growth expected during the holiday quarter. FedEx expected peak holiday package volume to be a whopping 22% higher than last year.

Likely to be a future case study on the importance of planning and collaboration, Fortune shared this week that shippers “have done a remarkable job, quite honestly, of preparing for this peak season,” per Bill Brooks, vice president for transportation at business consulting firm Capgemini. “The volumes are unprecedented. Even with all that, they’re able to handle it.”

The scale of the effort required is impressive with FedEx hiring 70,000 new workers, UPS adding 139,000 seasonal and permanent staff and 20 new shipping warehouses. Amazon said it would hire 100,000 seasonal shipping workers, following a 175,000 worker hiring spree last spring.

Suppliers have been working together to help meet the distribution demands this holiday season with many retailers stocking up on inventory a month in advance and encouraging customers to shop early by offering sales in the season. There has also been a tremendous expansion in curbside pickup, made more accessible throughout the pandemic, which has reduced the number of packages to be shipped.

While challenges still exist with a shortage of labor and air freight capacity, the planning efforts to grow shipping capacity and suppliers adjusting to reduce holiday packages to be shipped seems to be succeeding. As of mid-November, on-time deliveries for FedEx, UPS, and USPS were all above 95%, according to tracking firm ShipMatrix.

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