Can Retailers Keep Up With Holiday Shipping Demands?

As Christmas quickly approaches and the holiday season rolls on, both consumers and retailers are faced with the looming pressure of shipping deadlines.

According to Internet Retailer, more than half of consumers are fearful that their orders will not be delivered by Christmas if they order after Dec. 15.

Many of the top 100 U.S. eRetailers are using the date of Dec. 16 as the deadline for ensuring in-stock products will be delivered by Christmas. For some online merchants, that date also signifies the last day they will offer free standard shipping.

It just so happens that Dec. 16, Internet Retailer stated, is also Free Shipping Day, which roughly 1,200 retailers are expected to participate in this year. Adobe Digital Index data revealed that last year’s Free Shipping Day generated $1.48 billion in sales for eCommerce retailers, a 21.5 percent jump from $1.35 billion in 2014.

As the online orders pile up and the shipping deadlines close in, carriers are struggling to keep up with the demand.

Both UPS and FedEx are extending delivery windows and relocating staff in order to handle the record holiday shipping volume.

Software developer ShipMatrix analyzed millions of packages and found that on-time delivery rates for UPS ground fell to 96.3 percent last week, while FedEx Ground’s hit 96.9 percent, even when adjusted for weather and other unavoidable delays.

Usually, on-time delivery rates average between 98 percent and 99 percent during the rest of the year.

“If their supply chain is already starting to get clogged, the issue could compound on itself, and we could experience a situation where people aren’t getting their packages for Christmas,” Brandon Staton of logistics consultancy Transportation Impact told The Wall Street Journal.

“Until this trend shows any sort of stabilization, the carriers — I don’t care how good they are — are going to have a tough time trying to figure out where to allocate their resources in order to keep up with demand.”