FedEx expects a 12% increase in holiday season volume, predicting a record-breaking 317 million shipments between Black Friday and Christmas Eve. It issued a press release on Monday and outlined the measures it has taken to prepare for the peak season – including hiring 55,000 additional workers including package handlers, drivers, couriers, and other support positions.
FedEx noted that the season includes one more day than last year and expects three volume spikes: Cyber Monday and the first two Mondays in December. It expects to move more than double its average daily volume on those three days.
To help it keep up with volume, FedEx Ground will run seven-day sort operations during peak season, it said. It has also been investing $1.6 billion in FedEx Ground this year, most of which is for capacity and automation.
“FedEx Ground continues to advance the industry’s most automated hub network with investments in package sortation systems that enable flexible and reliable operations and six-sided scanning tunnels that boost data and image capture,” it said.
And it’s adding technology to help its FedEx Express planes land in low visibility conditions and mitigate potential weather delays.
Interestingly the Wall Street Journal noted, “Executives warned on their most recent earnings call that the company plans to turn away packages it doesn’t have room for, something it did in past years.”
But in that earnings call, FedEx executives also said the company is working with large retail customers on their promotional activities to try to shift or smooth demand around peak days. “We are still dealing with capacity constraints in our 7 to 10 day period during peak season. We will continue to work with the retailers and e-tailers in an effort to try to shift that demand,” Mike Glenn told analysts.
In Monday’s release, the company also boasted that its FedEx Ground service is nearly 27% faster than UPS Ground, reporting that 83% of FedEx Ground shipments are delivered in three days or less. And it said FedEx Ground retail rates are 10% less than UPS Ground retail rates.
FedEx CEO Frederick W. Smith said, “The shift in consumer shopping patterns, fueled by the rise of ecommerce, continues to drive our volume. Our strategic investments, unmatched flexible global network, and more than 325,000 dedicated team members around the world are ready to help the holidays arrive again this year.”