• on Jul 6th, 2015 in Delivery & Collection | 2 comments

    It’s Christmas in July for the retail industry. Holiday decorations might not hit stores for a few more months, but retailers are now working on their 2015 holiday plans. 

    And you can bet that shipping strategies are a big part of those plans. Online sales made up about 10 percent of the $616 billion in holiday sales last year, so shipping plans are a top priority for retailers. In addition, more and more retailers are eyeing the international market, which means cross-border shipping is part of the mix as well.

    As for its plans, the shipping industry is likely to heed the ghost of Christmas past to avoid repeating mistakes. UPS reportedly just started informing certain retailers that it will not give discounts on oversized items, such as furniture and grills, this holiday season. These items don’t move on the company’s automated conveyor belts and require more costly manual handling.

    UPS is especially anxious for a spotless 2015 holiday season after 2 years in a row of missteps. In 2013, a surge of last-minute online orders and bad weather led to delivery failures. This past year, UPS spent too much money on extra hires and added automation to avoid the same mistake. While service was strong, the company reported disappointing financial results. 

    For the U.S. Postal Service, our recent audit report provides some insights into what worked well in the 2014 peak holiday season and what could be improved this year. By most accounts, the Postal Service had a successful 2014 holiday shipping season. It processed a record 865.4 million packages during the December 2014 peak period with strong service performance. While the number of packages increased by more than 88 million, delayed packages decreased by 1.8 million compared to the previous year. In addition, service improved in six of the nine package categories the Postal Service measures. 

    Still, it could do better to ensure packages are processed on time so as not to put revenue at risk. Package processing machines should be timely installed and fully utilized during the peak season. In addition, enough temporary workers should be hired to meet peak demand.  

    How soon do you plan to start your holiday shopping this year? Do you expect to do more online shopping this year? If you used online shopping last year, how was your experience?  

  • on Dec 30th, 2013 in Delivery & Collection | 53 comments

    The 2013 holiday season turned out to be a particularly eventful one for e-tailers and the shippers that deliver all those packages to your door.

    Factors like fewer than average shopping days between Thanksgiving and Christmas and an increasing comfort level with online buying helped push holiday e-commerce up significantly. In fact, demand exceeded expectations and stressed shippers’ capacity, causing some late deliveries of their goods.  

    Package delivery is clearly a growth industry and the Postal Service expects its piece of that business to rise 6 to 7 percent annually through fiscal year 2017. But is the Postal Service ready for all these packages? Can it meet the growing demand, or is it hampered by a delivery infrastructure that is largely geared toward letters and flats? We recently took a look at the issue and the results were mixed.

    Our audit report, Readiness for Package Growth – Delivery Operations, found the Postal Service has done a good job of managing package growth in terms of mail volume and workhours. But it could make some changes to better handle future increases. For example, to-the-door delivery works well but curbside mailboxes were primarily designed for letters, flats, and small parcels, and they can’t easily accommodate multiple or large packages. We suggested the Postal Service look at modifying cluster boxes to accommodate more packages.

    We also encouraged the Postal Service to explore investing in shelving space on delivery vehicles to accommodate packages and to continue to develop an advanced dynamic routing system. Dynamic routing analyzes individual addresses to tell the carrier how to get to them more quickly. The tool takes into consideration things like traffic congestion and left-hand turns, both of which can eat up time and fuel. These and other steps outlined in the report should help the Postal Service expand services and increase revenue to meet growing customer demand.

    So, what was your experience over the holidays? Were you among the many Americans who bought more gifts online than in previous years? Were your delivery services reliable or did any part of the experience discourage you from future online buying? What changes would you like to see in delivery and returns?