The U.S. Postal Service, FedEx and UPS have released recommended ship-by dates for gifts to be delivered in time for the December 25 holiday, which lands on a Saturday this year. With supply chain snags slowing deliveries to both retail stores and home doorsteps — and the USPS itself slowing mail delivery as part of a broad cost-cutting plan — retailers were already recommending consumers shop (and ship) early.
Category: Industry News
In late 2014, Scott Ruffin was deep in the trenches of Amazon’s logistics operation, when he was tapped to solve a major problem. The company was relying on air cargo partners to haul its packages across the country, but needed more space to meet its rapid growth.
Amazon began to lease its own airplanes. And in 2016, Ruffin launched Amazon Air, a dedicated cargo network that would directly rival shipping shipping giants UPS and FedEx.
Before Amazon Air, Ruffin had an early role in developing Amazon’s sortation centers, the facilities that allow the company to better control a package’s journey to a shopper’s doorstep and to speed up the process.
Facing the swiftly approaching holiday season, companies are throwing massive job events, touting pay hikes, and embracing the gig economy to staff up in critical supply chain roles.
Amazon said it plans to hire 125,000 new warehouse and transportation employees. Walmart declared that it will onboard 20,000 new permanent supply chain workers. FedEx recently touted 90,000 open positions. UPS said it intends to hire over 100,000 workers for the holidays.
The pressure is on, as these companies and many others face one of the toughest hiring seasons for the supply chain on record, experts say.
FedEx and UPS also have added a series of surcharges and other higher fees
Shipping rates are going up faster than they have in nearly a decade, increasing pressure on merchants to raise prices or find other ways to offset higher costs.
FedEx Corp. on Monday said shipping rates would go up an average of 5.9% next year across most of its services, the first time in eight years that it or rival United Parcel Service Inc. has strayed above annual increases of 4.9%.
UPS is expected to release its rate increase for 2022 in the coming weeks. The two carriers have moved in lockstep with their annual price increases since at least 2010, according to Transportation Insight LLC, a supply-chain management and logistics firm.
The move away from a 4.9% annual increase shows how the pricing power has shifted to carriers like FedEx, UPS, and the U.S. Postal Service, which have seen demand for their shipping capacity and home delivery soar during the pandemic. The higher-than-normal rate hike also is a sign of inflation reverberating across the global supply chain.
They have been every year since at least 2016, according to e-commerce company Pitney Bowes. To date that loss has largely gone to Amazon as the ecommerce giant steadily moves delivery in-house.
But a slew of new players, juiced by millions in venture capital funding, is entering the package logistics fight to see if they can’t can’t change a decades-old power dynamic.
UPS and FedEx are losing market share
They have been every year since at least 2016, according to e-commerce company Pitney Bowes. To date that loss has largely gone to Amazon as the ecommerce giant steadily moves delivery in-house.