Holiday season surge could hit 400 million Packages
UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
Memphis – FedEx expects to handle between 380 million and 400 million packages this holiday season, positioning the Memphis-based integrator at the epicenter of yet another record-breaking holiday season in 2017.
Citing “changing market dynamics related to the growth of e-commerce,” FedEx said it expects the highest surges in demand to occur on Mondays, more than doubling the integrators average daily volume in the wake of weekends spent shopping online.
The Memphis-based company’s annual peak season forecast anticipates 26 million packages a day on those Mondays, double the usual amount, as online retailers ship out orders placed over weekends.
The surge is being driven by e-commerce, which the National Retail Federation expects to grow 8% to 12% this year, more than double the increase for all retail.
FedEx’s projection represents a 20% to 26% increase over two years ago when the 2015 peak forecast projected the company’s network would handle 317 million shipments between Black Friday and Christmas Eve. Last year FedEx projected a 10% increase but did not issue a specific volume forecast.
UPS expects to make 750 million holiday season deliveries, a 7% increase from 2016, and the U.S. Postal Service projects a double-digit increase to nearly 850 million
Folks in the package-delivery business still shudder when the 2013 holiday season comes up when volumes rose so fast that UPS said, “the volume of air packages in our system exceeded the capacity in our network.” Thousands of holiday packages had to be delivered after Dec. 25 that year, as a result.
That fiasco taught the industry a valuable lesson about peak-season preparation. As it does every year at this time, FedEx is on a hiring binge, adding more than 50,000 temporary positions leading up to this year’s peak. FedEx also said that it has bolstered its facilities, automating as much as possible, and forecasting a US$1.5 billion capital expenditure for FedEx Ground. The integrator has also added a new FedEx Ground hub and expanded two existing hubs since the 2016 peak season.
“We have engineered our networks to accommodate the continued rise in demand for larger, heavier packages, including 15 non-conveyable annexes to handle those packages that will not fit on our sortation equipment,” the company said.
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On the aircraft side, FedEx said it has added 195 aircraft since the carrier launched its fleet modernization program, which it hopes will translate into more-reliable aircraft and more-efficient operations.
So, when U.S. District Court Judge Timothy S. Black warned of a “Christmas without Amazon,” in the context of a dispute between Atlas Air and its pilots, he touched on a subject that keeps executives across the business awake at night. But from the sound of it, little sleep will be lost at FedEx – not this time around.
