UPS Finally Hit the Mark This Holiday, While FedEx Stumbled Late

The hard end to the holiday season for FedEx could translate into big numbers for Amazon and other online retailers. They also declined some last minute shipments from retailers who wanted to move to UPS because of high volumes with other shipping companies, knowing that could compromise their ability to get all their packages to their destination on time.

FedEx has blamed the delivery issues on an unprecedented e-commerce surge during the weeks leading up to the Christmas holiday, saying that volumes "far exceeded all previous records".

UPS has designated January 6, 2016, National Returns Day when it expects customers to ship more than a million packages back to retailers on that day alone. So by December 21, UPS said packages using three-day shipping would miss the holiday entirely, according to its holiday service schedule that was given to customers in October. On Dec. 24, FedEx released a statement saying, "Due to the severe weather yesterday, we made operational adjustments to keep our team members safe and to avoid major service disruptions". To catch up with its shipping thousands of the company's workers reported for work on Christmas Day. (NYSE: UPS) two years ago, the company finds itself at the center of a fierce storm for failing to deliver ordered packages before Christmas. Later in the season, UPS worked with some of its largest customers to get orders into its warehouses on December 19 instead of December 21 in order to process those orders more quickly and improve the chances of on-time delivery.

Despite widespread criticism, FedEx appears to have had a better on-time performance this holiday season than in either of the past two years, according to delivery tracking firm ShipMatrix. (NYSE: UPS), for instance, was able to clear its backlog by 8 pm on the eve of Christmas with its staff taking time off on Christmas day to be with family and friends.

On Christmas Eve, ShipMatrix showed FedEx had on-time deliveries of about 96 percent, compared with about 98 percent by UPS, after a weather-related dip at both companies earlier in the week. But early indications suggest that online sales grew substantially this year. It was a much-needed boon for retailers but a strain for delivery companies amid a shift toward online purchases. With shopping patterns switching online many continue to question whether the measures put in place are effective to cope with an increase in packages going forward.

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