How UPS Is Gearing Up for the Holiday Shopping Season
By Ina Steiner
Last year, many online merchants had to face unhappy holiday shoppers who were disappointed when their packages were delayed and, in some cases, didn't arrive in time for Christmas. The Wall Street Journal chronicled the problem of delivery delays on December 25th, writing, "Although weather, Web glitches and late deliveries from manufacturers played a part in late deliveries, the sheer unanticipated volume of holiday buying this year may have been the biggest problem."
How shipping carriers perform during crunch time impacts consumer confidence in online shopping, and late deliveries can harm a seller's reputation. After facing a perfect storm that resulted in a challenging holiday season last year, UPS said it began planning for this year's peak shipping season on December 26, 2013.
UPS spokesperson Susan Rosenberg explained to EcommerceBytes how the company is gearing up for what could be another blockbuster season for ecommerce. Solutions include better communications with large customers and increased capacity.
One improvement that may be especially welcomed by sellers are upgrades to Web and mobile apps to provide better information on package location and shipment status. Last year, some readers reported that buyers looking at tracking information for packages that were delayed due to weather events saw the tracking status as "unshipped." The problem resulted in buyers blaming sellers, "causing huge headaches, damaging feedbacks and metrics and costing a ton of money," as one seller described.
Rosenberg said with the upgrades they made this year, "Both shippers and consumers will see improved package status detail, simplified messaging and more help resources."
Recognizing the importance of ecommerce on its business, UPS will have normal pickup and delivery for all service levels the day after Thanksgiving compared to previous years where there was only service for UPS Air and international deliveries on that Friday.
Something all online sellers should be aware of is that the UPS is suspending its service guarantee for UPS Ground and UPS Standard packages picked up or scheduled for delivery between December 11 - 24, 2014.
Last Year's Challenges Lead to This Year's Improvements
Three main issues impacted UPS operations last year, according to Rosenberg, including weather events throughout the country. Not only did ecommerce shipments far exceed projections, starting with a strong Cyber Week, but last-minute promotions by online retailers pushed UPS' heaviest day six days beyond what it had expected, she said.
This year, the company's plans take into account not only growth for the holiday season but also the growth in global ecommerce. "That means introducing new flexibility into our network and modifying options for the convenience and accessibility of both shippers and receivers."
Rosenberg outlined four key areas where UPS is concentrating its efforts:
1) Early, meaningful discussions with larger customers for a joint commitment of forecasted volume. "And," she said, "continued refinement of their plans so we don't have surprises."
2) Expanding network capacity. UPS is adding both permanent and flexible, temporary capacity. They include the following:
- Three new fully-automated hubs this year, all operating by peak season (Dallas Metroplex, Richmond, Calif and Laredo, TX).
- Fifty new processing sort shifts in different places around the country.
- Temporary mobile delivery villages (think pop-up delivery centers) being built nearby existing centers.
"All of this lets us flex the network for the holiday spike and then to de-activate or reposition the modular units where needed as growth patterns change or to be functional while we have building construction underway," Rosenberg said. "We're using our U.S. regional air network in a more dynamic way and will have more leased aircraft in addition to the UPS fleet."
3) Improved timely and accurate visibility of shipments. This involves technology upgrades to internal systems and the advanced data feeds for trailer arrival and load information from large shippers.
"We've also accelerated the deployment of new technologies for routing and dispatch for even more efficiency gains to reduce miles traveled yet increase delivery stops and volume carried," she said.
4) Enhanced communication with shippers and receivers. Web and mobile app upgrades have been enhanced for better information on package location and shipment status.
"We've simplified exception alerts both online and via UPS My Choice for clearer status throughout the shipping process and recovery for any delay. At peak, shippers and consumers will find expanded live chat, social media and more support resources."
What to Know about This Year's Plans
It won't be long before holiday themes start popping up on shopping sites across the web, with Santa Claus impatiently pushing aside Halloween witches and Thanksgiving pilgrims. We asked Rosenberg additional questions about how UPS is gearing up for the busy holiday season.
EcommerceBytes: Is UPS forecasting a greater growth rate for this holiday season compared to last year? And is there a tendency for a greater volume in the last days leading up to the Christmas holiday?
Susan Rosenberg: We're not sharing forecasts at this time because the customer dialogue is ongoing. We continue to see three general spikes - Black Friday through Cyber Week; the full week before Christmas; and post-Christmas returns into the New Year.
EcommerceBytes: The weather can put a monkey wrench into the works. Has UPS found any workarounds for such events?
Susan Rosenberg: UPS has 5 staff meteorologists who engage directly with our contingency planners. Safety is our guide for presence on the roadways or skies.
The advantage of the UPS integrated network and mix of intermodal operations is flexibility to shift volume flows for processing through both ground and air hubs. That doesn't mean there won't be delays, but it can speed recovery time to resume full operations.
And we'll have improved communications about weather impacts. Remember, UPS may be operating while many businesses remain closed, and we're committed to the prioritization and attention to air express, perishable and time-sensitive shipments.
EcommerceBytes: Online merchants advertised delivery by Christmas later last year (we compared it to a game of chicken). Does UPS expect that again this year, and how is it getting ready for such a scenario?
Susan Rosenberg: We're talking to shipping customers earlier to get the true picture of their activity. Even the retail industry is asking merchants to be responsible in the expectations they set for online shopping fulfillment.
EcommerceBytes: Can you tell me what you are telling your merchant customers about shipping cutoff dates this year?
Susan Rosenberg: The UPS holiday calendar has been available since mid-July as a simple click on the home page of Compass.ups.com.
They'll also find useful information to guide their holiday planning on this page.
UPS air and international shipments picked up or delivered within the U.S. are guaranteed throughout the holiday season, though there may be extended commit times on specific dates. The UPS service guarantee is suspended for UPS Ground and UPS Standard packages picked up or scheduled for delivery between Dec 11 and 24.
EcommerceBytes: Will you expect workers to work on Christmas Day or the day after Christmas this year if necessary?
Susan Rosenberg: No plans for work on Christmas Day. Friday, December 26 is a regular work day, though many of our customers' businesses may remain closed and they keep us informed of those plans.
What's new this year is operations for all services on the Friday after Thanksgiving. Historically, we only had air and international deliveries that day and no ground operations.
That will position volume for processing and additional sorts through the weekend and Cyber Week. And the calendar gives us a second extra day of operations.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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