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As Retailers Break Online Sales Records, Delivery Services Struggle To Keep Up

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Holiday shopping fueled by Black Friday and Cyber Monday deals have put an unexpected strain on UPS and FedEx over the past few weeks, but the shipping services assure customers that Christmas deliveries will still come as they make changes to handle the large volumes. The on-time delivery rates of both services have declined by 6 percent since Thanksgiving, leading to increased pressure on UPS and FedEx as the holidays approach.

According to independent shipping consultant service ShipMatrix, 97 percent of deliveries are usually on-time this time of year, but that rate has fallen to 91 percent in lieu of the influx of online holiday orders. Retailers such as Target reportedly broke sales records during the weekend after Thanksgiving by offering shoppers deals too good to pass up.

Even though retailers are enjoying the surge in profits, shipping delays could mean that retailers will need to issue refunds or other types of compensation as they did two years ago, especially if orders don’t make it to their intended destinations by Christmas day.

ShipMatrix research analyst Mark D’Amico said that a majority of the late packages are only one day late. As the holidays draw closer, the strain on FedEx and UPS could worsen as shoppers place last minute orders.

Steve Gaut, Vice President of public relations for UPS, said that even though “there were a couple of high impact areas”, most UPS orders are arriving on time.

The vast majority of UPS customers are receiving their packages on time per the scheduled shipping commitments.

Sharon Young, spokeswoman for FedEx, said that the surge in online orders also occurred “earlier than ever before”. Young indicated that measures are being put into place to handle the extra volumes.

Our networks are performing as designed, and we are working to absorb the extra volumes.

According to UPS, there has been a 10 percent increase in package deliveries this year compared to last during the same time period. They anticipate 630 million holiday orders will be delivered through their service once all is said and done.

Those expecting something from Santa shouldn’t worry; D’Amico said that the surge in orders is expected to decline now that most of the online deals are no longer available, giving the shipping services a chance to catch their breath.

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