Published: Thu, December 07, 2017
Markets | By Rosalie Gross

UPS struggling to keep up with holiday shipping demand

UPS is sticking with its forecast of holiday shipments of more than 750 million package deliveries between Thanksgiving and December 31, a 5 percent increase over past year.

UPS, which handles deliveries for numerous biggest retailers including Inc., Wal-Mart Stores Inc. and Macy's Inc., is adding one or two days in transit time on an unspecified number of deliveries following record sales around Cyber Monday, spokesman Steve Gaut said Tuesday. UPS spokesman Steve Gaut said delivery should be back on track by the end of the day Wednesday.

While the company declined to put numbers on the delays, research firm ShipMatrix said last week that 89 percent of UPS Express packages were delivered on time.

"We have resolved the situation that created the delays", Gaut told CNNMoney. But the growing popularity of online shopping has made for more packages to process and deliver.

Online shopping has been so successful this year that UPS can't keep up. A record $6.59 billion was spent online overall, according to Adobe Analytics data.

FedEx "well-positioned" to meet record demand during the peak season, when it plans to deliver up to 400 million packages, said spokesman Glen Brandow.

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The seasonal challenges have been compounded by the fact the improving economy has made it more hard - and expensive - to find seasonal help.

The president of the Teamsters union, which represents UPS drivers, said the company wasn't staffed properly and has underestimated Cyber Monday purchases three straight years. It added the same number of people in 2015 and 2016.

"We are taking all necessary steps to ensure we are serving our customers' demand, especially during this holiday period", Gaut said.

The company has already notified workers at more than 100 delivery centers that it may raise driver work hours to 70 hours over an eight-day period. The Teamsters represent more than 250,000 UPS workers and are now engaged in contract talks.

"Our upgrade of UPS to buy reflects secular, e-commerce growth opportunities and current valuation that we believe overly discounts a heightened investment cycle", wrote Mehrotra.

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