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An influx of mail, a historic boom in online holiday shopping and one of the biggest snowstorms in the Northeast for years have combined to overwhelm the US maritime system.
An estimated 6 million packages a day are piling up in retail warehouses or shipping centers and awaiting pickup by FedEx, UPS, Amazon, the US Postal Service and other shippers. An additional 3.5 million packages are picked up daily but do not reach their destination on time, according to the latest shipping data. The situation could worsen soon: USPS on-time delivery rates fell to just over 86% in the third week of December, from 93% three weeks ago.
That’s according to estimates from ShipMatrix, a software company that helps retailers and others track shipments and collects data on millions of packages sent from over 100,000 locations in the United States.
“Our whole industry is under water because of the demand [for deliveries]Said Satish Jindel, President of ShipMatrix. Friday will likely be the last day consumers can ship items by regular mail to arrive before Christmas, he added.
Indeed, the deadline for packages reaching their destination using standard delivery before the Christmas holidays has likely passed for most retailers and shippers. The last official USPS day for delivery before Christmas is Friday, December 18. But even more expensive, two-day or overnight shipments can also run out of capacity. Small business owners, according to Business Insider, say FedEx is rationing the number of deliveries it will make to retailers due to the slump in demand. Some were limited to 75 packages per day, he reported.
A FedEx spokesperson told CBS MoneyWatch following questions about retailer shipping limits that the company was “working closely with customers” ahead of the holiday season to “ensure the best possible service.” . She added, “Throughout Peak, we continue to work regularly with customers on ways to take advantage of our network flexibility and seven-day operations during this busy time. The spokesperson declined to say if FedEx had placed any parcel limits.
The stalemate described by shipping industry veterans – worse this holiday season than in previous years, they said – is reducing the holiday shopping season, frustrating both consumers and retailers and potentially can harm the economy as the recovery Coronavirus pandemic seems to sizzle.
FedEx and UPS refused to disclose the number of packages delayed in transit. A UPS spokesperson said 96% of its shipments arrived on time this holiday season. But that figure only includes packages recovered by UPS – not those it missed.
“This is one of the most successful peak shipping seasons ever as we are focused on maintaining a reliable delivery network that all of our customers can count on,” said a UPS spokesperson in an emailed statement.
“The data provided by third-party consultants can vary widely depending on the specific markets, customers and shipping routes they choose for their analyzes,” the FedEx spokesperson said. She also said the company’s role in distributing the Pfizer-BioNTech vaccine did not affect regular shipments, noting that the company was using a separate fleet of trucks and planes for this effort.
“As previously stated, we continue to work closely with our customers to manage their volume and help ensure the best possible service,” added the FedEx spokesperson.
“Waiting for reimbursement request”
A number of retailers say they are facing shipping delays. Earlier this month, Victoria’s Secret owner L Brands warned investors in a filing with the United States Securities and Exchange Commission that “additional constraints” on shipping capacity during the holidays could hurt sales. On December 15, Etsy also updated its shipping deadlines for its retailers and asked them to add the dates to their product description pages.
Arlene Marie Mathews, a Milford, Pa.-Based supplier who sells bath lotions and aromatherapy on Etsy and typically ships via the Postal Service, said customers had been experiencing delays since late November and some orders were delayed for two weeks. On December 16, she updated her product page on Etsy to warn that orders can arrive up to 10 business days late.
“I’m currently inundated with messages from customers asking where their packages are. Some get it, some don’t,” Mathews told CBS MoneyWatch. “I am waiting for refund request messages to start flooding my inbox at any time.”
Etsy said it would allow sellers to report removal of all negative reviews from customers complaining only of shipping issues. A spokesperson for the e-commerce company said it has “dynamically adjusted estimated delivery dates” on its website to provide buyers with the latest information.
“We know the holidays are an extremely important time for the 3.7 million creative entrepreneurs who sell on Etsy,” the spokesperson said in a statement. “To address carrier delays in the United States, our focus is on supporting sellers by making the latest information available to us.”
Olive & Cocoa, an online gift basket retailer based in Salt Lake City, Utah, is warning customers of possible delays and the fact that shipping windows are running out. December 16 was the last day the website said it could ship orders via Standard Shipping for delivery before Christmas. Subsequent orders will not arrive until December 29th. Two-day delivery is not available on the website until January, although time slots remain for faster and more expensive deliveries.
“Olive & Cocoa recognizes that the entire shipping system is overloaded,” said a spokesperson. “We work closely with our shipping partners to provide our customers with the best possible information on availability and shipping times, and to ensure that Christmas gifts ordered from Olive & Cocoa are delivered from a in a manner consistent with our high standards of customer service. . “
“They have no idea where he is”
Holiday shipping delays are causing headaches for consumers. Christine and Bruce Merevick from Chicago cannot see their family in Alabama for Christmas because he is undergoing chemotherapy and is considered at high risk for COVID-19. Increasing their frustration, the Merevicks’ vacation package, which they sent as a priority and insured in early December, has still not arrived. They filed a complaint, but were told to come back in two weeks.
“It’s just very frustrating,” Christine Merevick told CBS Chicago’s Tara Molina. “They have no idea where he is.”
CBS News correspondent Janet Shamlian reported this week that FedEx and UPS have told some retailers that they will not be collecting additional packages beyond their previous commitments until retailers see an increase in orders. This resulted in more orders being transferred to the Postal Service, adding to the mail delays that started this summer ahead of the November election. Earlier this week, the USPS, in a public statement, encouraged customers to send in their holiday gifts and cards “as soon as possible.”
Even before the holidays, shipping delays had been a problem during the pandemic, which prompted some consumers to increase their online orders and avoid in-person purchases. FedEx and UPS began increasing their hires as early as November to be prepared for the expected surge in shipments, adding up to 170,000 workers combined for the season. But these issues are now encroaching on many people’s vacations.
“It was not possible for shippers to be ready,” said Jindel of ShipMatrix. “It would have taken two or three years to be ready for the surge in demand this year.”
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