Christmas is the busiest shipping week of the year for many countries including the US, UK and most of Europe. This puts a strain on the capacity and operations of companies where delivery plays a key role in their supply chain.
The Internet is set to continue growing. Digital sales are expected to hit $94.71 billion this Christmas, according to research firm eMarketer.
In the US, UPS and FedEx forecasted a 14 percent and 10 percent jump, respectively, in deliveries compared to last year and took action by hiring tens of thousands of temporary employees to ensure they could manage the surge. Amazon also had a ‘blockbuster’ season – shipping more than 1 billion items this holiday, pushing it to its record season for sales.
A recent poll by Reuters, showed that more Americans did their shopping either solely or primarily online this holiday season as they searched for better deals and avoided the hassle of visiting crowded stores. Of the 1,150 respondents, 27 percent said they were relying on online shopping this year, up from 23 percent in a similar poll last year.
Outside the US, the industry is facing similar growth challenges. Canada Post had to deliver 7 million more packages this year than Christmas 2015, with 3,500 parcels delivered per minute on December 16th alone!
These challenges stretch beyond the holiday season. UPS has named the 5th of January “National Returns Day”. UPS projects that shoppers will send back some 1.3 million packages on that day alone, a good chunk of the 5.8 million packages UPS expects to return during the first full week of 2017. The shift to online shopping has been going on for years, but this unprecedented volume of packages carried by shipping companies is putting immense pressure on logistics networks, which could be a sign of things to come such as rising shipping costs or fewer free shipping options that helped fuel demand for online ordering.