On-time Delivery Rates of UPS and FedEx dropped on Holiday Deliveries

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United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) were under pressure during the holiday seasons due to the holiday e-commerce explosion.

According to Adobe Digital Insights report, sales on Cyber Monday increased 12.1% to $3.45 billion, which surpassed the estimates of $3.36 billion. UPS expected that the packages would be more than 700 million, which rose 14% from the same period last year, and FedEx anticipated a 10% increase.

Before the Thanksgiving holiday, both of the two companies made preparation for the busiest season. They replenished the season staff and take measures including extending delivery windows, temporarily dropping delivery guarantees and refunds, and stopped promises of certain-time delivery of express packages.

Even though both companies prepared for the holiday season, the on-time delivery rates for UPS and FedEx decreased during Thanksgiving holiday. It is reported that the on-time rates of UPS ground dropped to 96.3%, adjusted for weather conditions and other unavoidable delays. On-time rates of FedEx also dropped to 96.9% compared to the average rate during the rest of the year. However, the situation is much better in 2016 than that in 2015, when on-time rates of both firms were 95%, much lower than the 98% to 99% in normal days.

“A small percentage of packages have experienced some delay related to weather, wildfires or some operational challenges,” said Susan Rosenberg, the spokeswomen of UPS. FedEx said this week that it continues work with largest peak customer, and is adding hours for some staff to deal with the busy season.

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