FedEx Blames Record Package Numbers For Service Delays (NYSE:FDX)

By Christmas Eve, both carriers had recovered, the numbers show, with on-time performance rates of 96.2 percent for FedEx and 97.7 percent for UPS. Memphis, in which FedEx's major air hub is located, was affected by severe storms before Christmas.

FedEx announced that in the last run up to December 25, it handled volumes that exceeded all previous records including a huge surge during the last minute in shipments from online shoppers. "My kids thank you for getting far less presents".

After a week of holiday deliveries that didn't all make it on time, FedEx is talking about what went wrong - and it's not taking all the blame for itself.

UPS had a dip that was similar with just 79.5% of their packages delivered timely on December 23, which was down from its December 21 rate of 94%. The ShipMatrix data covers each year's holiday season from Cyber Monday through Christmas.

FedEx's guaranteed express packages typically operate as high as 99 percent on time said WSJ, but it appears as though they missed the mark by a couple of percentage points, which is still a large number of packages.

"The majority of their problems were in the first week of the month", says ShipMatrix research analyst Mark D'Amico.

In explaining what caused UPS's delivery snags earlier this holiday season, chief executive David Abney said in a CNBC interview on Tuesday that there was a discrepancy between company expectations and actual package volume.

The specter of late deliveries that happened in 2013 due to a confluence of bad weather and late orders have hovered over the shipping companies ever since.

In past years, United Parcel Service (UPS) and others faced criticism as packages failed to arrive at their destinations on time before the Christmas holiday.

Both carriers rebounded with better on-time performance on Christmas Eve.

In the announcement made public on Monday, the spokesperson didn't actually detail the reasons why FedEx was so overwhelmed by this spike in consumer demand. FedEx transports SmartPost packages for most of the journey and passes them to the U.S. Postal Service for final drop-off at customers' homes.

"We attributed (the last-minute surge in orders) to our improvement in messaging on shipping timelines along with our improved positioning for our gift certificates", he says. IBM did not break out last-minute online shopping statistics. Smartphones accounted for 40.2% of e-commerce traffic during the holiday shopping season compared with 11.8% for tablets.

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