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The Factors Behind the UPS Failure to Deliver Christmas Goods

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UPS Didn't Have Enough Aircraft to Meet Huge Volume Surge, but Retailer Issues, Weather, also Played Key Roles.

 A possible candidate for SCDigest's list of worst supply chain disasters of all time, UPS and to a lesser extent FedEx, were overwhelmed with late ecommerce deliveries, and had to notify thousands of consumers their Christmas gifts would not be arriving on time.

In UPS' case, the bottleneck appears to be the number of aircraft it had in service, which was not enough to meet the last minute volume spike. UPS had been forecasting an 8% average rise in its daily shipping volumes during the holidays versus 2012. However, ecommerce sales in the last weekend before Christmas jumped by 37% from the year before, according to data from IBM Digital Analytics. On Monday Dec. 23, growth in online orders spiked by 63%, according to Mercent Corp. 

That volume growth issue was exacerbated by the mix between air and ground shipments. Many emerchants offered last minute shipping deals that required air service, or were behind in their own order fulfillment processes and had to switch to higher cost air shipping to meet promised delivery dates.

At UPS' massive Worldport hub in Louisville, workers were putting in 100-hour weeks to sort packages, and were working feverishly in the last dats before Christmas to move boxes for placement on to planes. But there weren't enough planes to handle the volumes...Read more on SC Digest

Last modified on Wednesday, 08 January 2014 16:33

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