UPS struggles to keep up with Cyber Monday orders

Ivan Schwartz
December 7, 2017

United Parcel Service Inc.is struggling to handle the surge in shipments from online shoppers, resulting in delivery delays early in the critical holiday season and prompting the carrier to a push drivers to work extra hours.

The delivery company said Tuesday that a small percentage of packages are being delivered one to two days late as the company works to clear a Cyber Week backlog.

The company says package deliveries are being delayed because of an unexpected flood of online orders after Thanksgiving. Adobe estimated that Cyber Monday sales hit $6.6 billion this year, up more than 17% from 2016. Gaut said the recent delays would not change the hiring target. It expects to be back to normal operations by the end of Wednesday.

UPS predicts that it will deliver 750 million packages between Thanksgiving and Christmas. But the growing popularity of online shopping has made for more packages to process and deliver. Spokesman Jess Bunn said FedEx was proud of its record and anticipated record volumes.

UPS, based in Atlanta, is making some adjustments to cope.

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In a letter to UPS CEO David Abney, James P. Hoffa also complained that the company plans to increase hours for drivers during the holidays up to 70 hours over an eight-day period.

"Our upgrade of UPS to buy reflects secular, e-commerce growth opportunities and current valuation that we believe overly discounts a heightened investment cycle", wrote Mehrotra.

"We are taking all necessary steps to ensure we are serving our customers' demand, especially during this holiday period", Gaut said.

UPS is sticking with its forecast of holiday shipments of more than 750 million package deliveries between Thanksgiving and December 31, a 5 percent increase over previous year. "We've been working a long time on this, and I think there's a lot of confidence throughout the group".

Other reports by GizPress

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