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'Shipageddon' Averted: It Wasn't A Bad Holiday Delivery Season After All

The holiday parcel-delivery season may not have come off perfectly, but the “shipageddon” that many had feared did not materialize.

Much of that was due to the performance of the parcel carriers, with their preparation for a nightmare peak-season scenario paying off in solid on-time delivery results under tough circumstances. UPS Inc. (NYSE: UPS) delivered 96.7% of its parcels on time during a five-week cycle tracked by consultancy ShipMatrix. FedEx Corp. (NYSE: FDX) clocked in at 95.1%, while the U.S. Postal Service, beset by understaffing and an avalanche of parcels from FedEx and UPS shippers whose volumes exceeded those carriers’ ceilings, came in at 93.2%, the consultancy said. 

FedEx and UPS actually posted better on-time performances than during the 2019 peak, and the Postal Service’s year-over-year performance was down by just 0.7%, ShipMatrix said.

During the critical Christmas week period, which ran from Dec. 20 to 26, UPS posted on-time delivery performance of 97.6%, FedEx came in at 96.5% and the Postal Service at 94.7%. Satish Jindel, ShipMatrix’s president, said the carriers’ Christmas week performance was better than it was during the prior week. Still, the huge spikes in volume resulted in more than 2 million parcels not delivered by Christmas, even with the carriers making deliveries on Christmas Day, Jindel said. 

To no one’s surprise, the 2020 peak was the busiest on record as more than 3 billion parcels were delivered, according to ShipMatrix data. E-commerce fulfillment and delivery activity has been elevated since March as the COVID-19 pandemic kept consumers out of the stores and on their mobile devices. The online order flow reached a crescendo during the holidays as another surge of the coronavirus collided with the always-busy seasonal cycle.

The delivery disaster that wasn’t also could be attributed to consumers’ tolerance of potential shipping problems due to the pandemic. A survey of 1,100 U.S. consumers published Tuesday by Convey, a last-mile technology vendor, found that 80% were willing to give retailers more time to deliver items during the holiday and 76% tempered their expectations for flawless on-time deliveries due to the extraordinary circumstances.

About 88% of respondents said their shopping experiences this holiday season were as good or better than in the 2019 peak period. Yet in keeping with what was widely expected to be a volatile cycle, 41% said that longer-than-expected shipping times were the biggest problem they experienced during the peak.

About 44% said they would start their holiday shopping even earlier for the 2021 holidays, an interesting observation considering that 2020 holiday shopping actually kicked off in mid-October when Inc. (NASDAQ: AMZN) held its two-day Prime Day ordering extravaganza after moving it from the traditional mid-July period due to the pandemic’s impact on Amazon’s operations.

In what may be a cautionary tale for carriers, 46% of the respondents held the carrier responsible for late deliveries, while only 19% blamed the retailer. At the same time, 47% said that a bad shipping experience would make it unlikely they would buy from that retailer again.

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