Less than a week remains until Christmas, and if you haven’t ordered all of your holiday gifts yet, it may be too late to ship them in time.
A huge increase in online shopping this year has demand for package delivery exceeding capacity this holiday season and stretching the delivery supply chain thin.
The deluge of packages has many package sorting, distribution and delivery workers at the U.S. Postal Service, FedEx, UPS and Amazon busier than they have ever been before.
“It’s crazy but with the COVID, it’s a little bit crazier, you know,” said Paul Jablonski, a driver for UPS, while on his route on Chicago’s Northwest Side one recent evening.
“I actually just had another [delivery] guy take some stuff off of me because they sent me out too heavy,” meaning Jablonski was given more packages than he could deliver in one shift.
“They sent me out with like 280 [packages] today,” he explained. “Normal day, without Christmastime, it’s like maybe 200, 190, and I can finish in about 8 hours. But 280 is too much; way too much.”
Jablonski says the holidays are always hectic, but for the 24-year-old “this one’s been a lot worse mainly ‘cuz of the COVID.”
He says in the early days and weeks of the pandemic, when much of the economy shut down and many people began working and schooling from home, there was a huge increase in package deliveries that made it seem like “it was basically Christmastime” in March. “And now it’s gonna be twice that,” with the surge in holiday package deliveries, he added.
The numbers bear that out.
Satish Jindel, founder and president of ShipMatrix, a company that tracks shipping data and provides technology solutions to shippers, says stay-at-home orders and consumers’ reluctance to go out and shop in crowded stores during the pandemic “have added a whole different set of volume that was not there,” prior to the COVID-19 outbreak.
“Basic day-to-day items that people consume are now being ordered online, so that increased demand by about 30% from what it was before,” Jindel said.
So the annual 30% to 40% surge in holiday package delivery is coming on top of that 30% increase that has already happened this year. As a result, ShipMatrix estimates more than 3 billion packages will be shipped between Thanksgiving and Christmas this year, up from 2.2 billion last year, a huge increase that exceeds the supply chain’s delivery capacity.
“It creates a logjam,” Jindel says.
ShipMatrix initially was projecting that demand would exceed capacity by about 7 million packages a day during this holiday season, but Jindel says increased hiring by shipping companies and additional weekend deliveries by UPS and the Postal Service in particular have helped close the capacity shortfall. Still, he says there will be about 3 to 3.5 million more packages than can be delivered each day.
UPS hired 100,000 seasonal employees for the holiday rush, on top of nearly 40,000 new permanent workers hired in the spring to help it meet rising pandemic-related demand.
FedEx, which says in a statement it is experiencing an unprecedented increase in shipping volumes, has added 70,000 new workers for the holiday season and expanded residential deliveries to seven days a week.
Amazon, which has most of its inventory in regional fulfillment and distribution centers, and thus can promise delivery of many items right up until Christmas, has hired more than a quarter of a million new employees this year, including 100,000 for the holiday season.
But to prevent their own delivery systems from being overwhelmed and collapsing under the weight of a tsunami of packages, FedEx and UPS cut off some of their retail customers after they reached predetermined limits, including Costco, Macy’s, Gap, Nike and many others.
Many of those retailers have had to turn to the U.S. Postal Service instead, which, as a public entity, cannot turn packages away. The result is widespread and significant mail and delivery delays across the country. A check of community discussion and message board sites such as NextDoor show a huge number of complaints from residents who say they’re going days without getting mail, packages are arriving days and even weeks late, and some who say they never received packages that tracking apps show as delivered.
“We’re really gridlocked all over the place,” a postal service manager in Ohio told The Washington Post. “It’s bad. I’ve never seen it like this before.”
Anne Goodchild heads the Supply Chain Transportation and Logistics Center at the University of Washington in Seattle, and she says it’s not just the increase in volume that shippers are contending with.
“There are dramatic changes to how people are buying, what they’re buying and where goods need to move through the supply chain,” she says.
For example, many “people used to have a certain amount of things delivered to their work, because they were there during the day,” Goodchild says. “So there is more home delivery. There’s a larger percentage of those things being delivered to homes instead of stores, because we’re doing less store-based shopping. So the size of the packages and the origins and destinations are different, which is another thing these carriers need to adapt to.”
But given the enormous changes in e-commerce and the demands being placed on the nation’s logistics and distribution systems, especially considering that it’s happening in the midst of a global health crisis, Goodchild says the supply chain is responding remarkably well.
“Overwhelmingly it’s been a story of resilience and adaptation that I think the supply chain and package carrier industry deserves credit for,” she says. “That whole system has changed and adapted to really continue to supply us, almost without disruption, all of the things that we want.”
“It’s remarkable that there’s been as little delay and disruption as there has been,” Goodchild adds.
Nonetheless, combine all the changes this year with the usual shipping capacity crunch around the holidays, add some bad winter weather as we saw in the Northeast this week, and Goodchild says procrastinating online shoppers should wait no longer.
“I think we can expect [packages taking] two or three more days in the system, so if you want things by the 25th, yeah, you should go do your shopping now,” Goodchild says.
That’s if it’s not too late already.
Jindel thinks it is, and he says many online shoppers “will be asked to pay express shipping charges of $20, $30 on a $50 item” if they want that gift to arrive by Christmas.
But because we have become accustomed to free shipping, he says “consumers are not going to pay for shipping charges,” and instead they’ll flood shopping malls, so he warns retailers to be prepared for huge crowds of people swarming their stores this weekend.
He tested this theory out at a mall near his home outside of Pittsburgh last weekend.
“There were no parking spaces for me to park. I had to wait for someone coming out to follow them to get their parking spot,” Jindel says, while inside the mall, “there were bodies all over. Yes, they wore masks but they were elbow to elbow. At the checkout counter, there were 20 people in line, 6 feet apart, to avoid paying the shipping charge.”
“So Mr. Retailer, make sure that between now and Christmas and New Year’s, make sure your store is stocked,” Jindel says.