Holiday Shipping 2020: Will Your Parcels be Picked Up and Delivered on Time?

Days after “Black Friday” UPS put holiday shipping restrictions on Nike and Gap and directed drivers to stop Cyber Monday pick-ups at other large retailers that are already exceeding parcel volume forecasts through booming online sales.  

In a year marked by a pandemic-driven shift in consumer buying habits that has driven consecutive quarters of record e-commerce growth, parcel networks have been at or near capacity for months. An unprecedented holiday peak has been on the radar, but as expected, early promotions and efforts to bring parcel volume forward could never be enough.

And in the midst of a monumental peak period, the parcel carriers continue to adjust their strategy to not only drive revenue growth in high demand e-commerce service areas, but also protect volume and achieve competitive advantage as Amazon’s delivery networks continue to evolve. 

Let’s look at some of the latest developments in the parcel shipping environment. They may affect your ability to delight customers this holiday season – and continue serving them well through 2021 and beyond.

E-Commerce Bloats Parcel Volume Beyond Capacity

Demand for the 2020 holiday peak shipping season is forecast to exceed 86 million packages a day – about 7 million packages outside current parcel network capacity. These estimates are validated by the National Retail Federation’s estimate that online shopping increased 44 percent during a five-day stretch that included Black Friday and Cyber Monday. 

Both UPS and FedEx prepared retail shippers for tight holiday shipping capacity, issuing advice for holiday shippers and encouraging clients to “shop earlier than ever with special offers or other incentives.” Yet, before December even dawned, both carriers were enforcing volume agreements and applying peak season charges and accessorial fees that create additional order fulfillment cost for shippers. 

In this environment it is critical that you have real-time understanding of your parcel shipping activity. While volume outside agreed-upon levels or historical averages may result in added cost during other parts of the year (as it did with COVID peak surcharges), packages exceeding a shipper’s determined space simply will not be served – at least until additional capacity becomes available.

Shipping Delays: Expect, Forewarn and Facilitate

Based on the recent trends observed, the average package delay rate during the 2020 holiday season may range between 14 percent and 18 percent. Consumers in densely populated cities can expect delays as high as 25 percent to 30 percent. 

Unless you create an expectation of delayed delivery, this can be a real problem for customer experience. Proactive communication with your customers about anticipated delays is one of the most important steps in preserving holiday shipping experience.  Use your website and email communications to help set expectations. 

That said, as consumers’ expectations on speed evolve, we are seeing an increased willingness to wait for a delivery, especially if it means free shipping. According to BoxPoll, more than half of consumers opting for free shipping (57 percent) considered five-day delivery to be “fast” – that’s up 8 percentage points compared to last year. One-third of respondents in the weekly survey said that seven-day delivery is “acceptable” at minimum.

Retailers are positioned to capitalize when they maintain awareness of shipping characteristics, alternative service models and, of course, their customers’ expectations. A “no-rush” option is a familiar part of the Amazon order process, and now other brands are following suit, even offering incentives for delayed or “slow service.” If a consumer considers five-day service “fast,” are you driving up cost by offering more service then they need?

FedEx Counters Amazon’s E-Commerce and Logistics Buildout

The FedEx acquisition of ShopRunner complements the actions that we have seen FedEx taking to remain relevant in e-commerce as Amazon continues to strengthen its logistics and fulfillment capabilities.  

The move reinforces the FedEx position as the anti-Amazon solution for companies seeking an Amazon alternative. Some of the carrier’s other recent activity following the same strategy includes:

  • Acquisition of GENCO to form the basis of Fulfillment by FedEx
  • Moving to a seven-day-a-week delivery schedule
  • Severing ties with Amazon for delivery to focus on other e-commerce volume
  • Pulling SmartPost deliveries into the Home Delivery network to bolster density and profitability.

With the global parcel market positioned to more than double by 2026, fueled by e-commerce growth and further accelerated by COVID-19, both FedEx and UPS will need to continue adding value to retailers’ unichannel solutions to keep volume when Amazon opens their delivery network to third party shipments. Amazon suspended its delivery service earlier this year due to the pandemic, but it is expected to reopen in the near future.

Of course, the parcel carriers are among an ever-growing contingent of organizations devising new strategies to compete with Amazon. Just in time for the holidays, WalMart is dropping the $35 minimum on free shipping for e-commerce purchases of electronics, toys and clothing made for participants in its WalMart+ membership program. The move – and the program – are both designed to compete with Amazon Prime.

Are You Positioned to Compete?

Can you quickly determine how your parcel shipping volume falls within your capacity agreement with your carriers? Do you know how quickly your customers are getting their orders – and whether you are meeting your delivery commitments? Can you determine which SKUs are making money – and which are not?

Ongoing awareness of evolving trends in the parcel environment – from service disruptions to capacity shortages – is integral to your ability to pivot your small package shipping strategy. 

Understanding how those trends affect your transportation cost and service to end customers requires expert analysis and actionable intelligence. The latest enhancements to our technology platform puts the power of that information at your fingertips with best-in-class visualization of data gathered across your entire supply chain.

Schedule a demonstration today to see how our clients are able to identify business trends, understand the impact of cost and service on working capital, and recognize ongoing performance improvement opportunities.

UPS Announces Last Day to Ship

A later-than-usual Thanksgiving on Nov. 26 condenses the shipping season by almost a week. Meanwhile, continuing effects of COVID-19 drive more buyers online to fill holiday wish lists – and many of them will avoid the personal contact of store shopping altogether.

Combined, these factors predict a capacity crunch for the small package networks. Already experiencing service delays and disruptions, these networks will not see relief until after the New Year, even as parcel carriers bring on thousands of new workers.

Be mindful of the “last shipping days” announced by UPS and FedEx, but that may not be enough to avoid a disappointed holiday customer in 2021. That’s why the world’s largest retailers are turning the holiday shopping clock from Black Friday toward a “Black October.”

Navigating this year’s peak season during the middle of a pandemic will require companies to be more creative and flexible. Forward-thinking shippers should be prepared to adjust. 

Retailers Drive Christmas Creep, Protect Experience

Amazon’s Prime Days on Oct. 13-14 delivered $3.5 billion in sales to small- and mid-sized businesses, with a 60 percent uptick in sales over last year. The move expedites holiday shopping – and product shipping. It also adheres to latest guidance from UPS: “encourage your customers to shop earlier than ever with special offers or other incentives.” FedEx echoes the same advice for shippers preparing for the 2021 holiday season.

Promotions like Walmart’s “Big Save Days” and Target’s “Deal Days” are all designed to pull parcel volume forward and avoid a costly catastrophe caused by a lack of capacity in December. 

If your organization is focused on protecting customer experience this holiday season, keep these five things in mind: 

  1. It is more important than ever to make sure that you proactively and clearly communicate the potential for delays. Every year the national carriers suspend their on-time guarantees during the holiday period. Earlier this year they suspended the guarantees due to COVID-19 complications and disruptions.
  2. Retailers can ship-to-stores for curbside pickup.
  3. Retailers can also ship-from-stores to shorten the distance that the package travels in the carrier’s networks and thereby reduce the potential for delay.
  4. Shipments can be made to alternative delivery locations such as certain retail partners, your customer’s office, or to one of the many parcel lockers.


5. Finally, if you operate multiple DCs across the US, it will be important to have the right inventory at the right locations to speed delivery and avoid split orders.

In a time where lockdowns have driven e-commerce shipments to levels never seen before, companies will need to deploy an all-of-the-above strategy to navigate it appropriately.

Know the Last Days to Ship

Now more than ever, it is important to make every possible effort to avoid deadline shipments. If you anticipate a last-minute holiday rush, make sure your UPS shipments go out on or before these dates to give your parcel the best possible chance to arrive by Dec. 24:

  • UPS Ground: As early as Tuesday, December 15* 
  • UPS 3 Day Select®: Monday, December 21 
  • UPS 2nd Day Air®: Tuesday, December  22 
  • UPS Next Day Air®: Wednesday, December 23

*Note UPS advises that most UPS Ground shipments have a later “last recommended shipping dates.” Shippers can track their transit time and cost here

FedEx released its holiday schedule ahead of UPS, and both schedules align closely. We detailed 7 tips for holiday delivery success shortly after the FedEx announcement. 

Regardless of the service provider you trust with your shipments, through full transparency and good information, you can effectively manage customer expectations while also syncing with the carriers that will deliver the goods to their doorsteps.  

You Shipped it – Did it Make Money?

Protecting customer experience this holiday season will require timely shipments and thorough communications throughout the sales cycle. 

Protecting your organization’s profit while responding to these customer expectations requires additional awareness and proactive measures.

  • Be aware of the Peak Season Surcharges and more importantly the differences for UPS, FedEx, Regional carriers and now the USPS.
  • Perform a detailed analysis to estimate the surcharges financial impact and to mitigate any negative effects on profitability.
  • Identify specific SKUs that will be negatively impacted and make decisions regarding those items to protect profit margins.  
  • Raise the cost of the item.
  • Increase the free shipping threshold.
  • Pass some or all of the additional cost to the customer.
  • Ensure carriers agreements are best in class and that invoices are audited for compliance to them.
  • Make sure you have the right box sizes so that the packaging is only la
    rge enough to adequately protect items during transit.
  • Work to eliminate operational errors that create avoidable costs such as incorrect addresses, unnecessary declared value and unauthorized packages.

To help shippers protect profit on every customer and every order, we created “You Shipped it … But Did You Make any Money.” Open it today for more guidance on making sure your peak season ends in the black.

Last Days to Ship? 7 Tips to Meet Holiday Deadlines

According to MarketWatch, Deloitte is forecasting a 1% to 1.5% year-over-year sales increase for the upcoming holiday season, during which time total retail sales will be about $1.15 billion (between November 2020 and January 2021). Meeting holiday shipping deadlines will be more important than ever.

“E-commerce sales, which have been strong throughout the coronavirus pandemic, are expected to climb 25% to 35%, reaching $182 billion and $196 billion,” Deloitte predicts. “Regardless of the scenario, however, consumers’ focus on health, financial concerns, and safety will result in a shift in the way they spend their holiday budget.”  

Here are seven tips for making sure your holiday packages get to their destinations on time.

7 Tips for Holiday Delivery Success 

The new realities of the current shipping environment have created ongoing service delays and disruptions, both of which have compounded into an overall capacity crunch for small parcel carriers. Working through this issue will require forward-thinking companies to adjust accordingly.

For example, shippers will need to be more creative and flexible to cope with the combination of COVID and the normal peak season. FedEx, UPS, and other carriers are hiring a lot more workers for the season, but we still expect to see some capacity issues. With the uncertainty, it will be more important than ever to inform customers when to expect shipments and be extremely transparent. 

Here are seven tips that will help you get your packages to their destinations on time: 

  1. Know the cutoff dates. FedEx’s last days to ship calendar is online here and UPS publishes its holiday deadlines here. The USPS plans to release its cutoff dates for holiday shipping sometime in October. Be sure to factor in these last days to ship dates when planning your holiday shipments. 
  2. Talk to your carriers. Proactively communicate with carriers regarding any expected increase in volume and any additional equipment requirements (e.g., feeders or bulk-type pickups). This will help your carriers plan ahead and provide some assurance that there will be capacity to accommodate your volume spikes (or, allow you to make alternative arrangements). 
  3. Next, talk to your customers. Companies should proactively communicate anticipated delays and properly set customer’s expectations on their websites and in any email communications. This could be as simple as featuring the holiday cutoff shipment dates prominently on the first page of your website. 
  4. Know the limits. Shippers should clearly understand any potential volume limits or caps that may be put in place by the carriers. Because these constraints can impact your ability to deliver on time, be sure to discuss them with your carrier. 
  5. Explore your options. Shippers should also understand their carrier options and negotiate favorable agreement terms to properly leverage all national, regional, and postal carriers. Having a “Plan B” in place is always a good idea during the busiest times of the year. 

  1. Start your product promos early. Don’t wait until the last minute to kick off your holiday promotions. Starting early will help you pull volume forward to avoid peak shipping periods and allow time for expected delays. 
  2. Factor in holiday business schedules. For example, USPS is closed for all of the major federal holidays. With delivery times varying between its services, knowing the cutoff dates and hours of operation are both important. 

Maintaining Transparency  

Reflecting on how parcel carriers performed for the 2019-20 holiday shipping season, UPS’ SurePost and FedEx’s SmartPost both assured 100% delivery for holiday orders that were shipped on or before December 14 or 9 (respectively). However, we also saw that as the cutoff date approached, those commitments slipped. This is something to keep in mind as you lay out your plans for the 2020-21 season. 

Using the tips outlined in this article, you can strike a nice balance between growing your company’s holiday sales while also letting customers know that there is a risk of passing the carrier’s “suggested date” for accepting pickup for a Christmas delivery. Through full transparency and good information, you can effectively manage customer expectations while also syncing with the carriers that will deliver the goods to their doorsteps.  

Peak Season Performance Requires Visibility

To make sure holiday shippers are aware of the latest trends affecting their transportation cost management, we convened a roundtable of our parcel experts. Watch or listen to our webinar “Peak Season: Are You Ready?” to hear Todd Benge, Robyn Meyer, Toni Caputo, Bernie Reeb and myself address the unprecedented challenges emerging his year.

This digital event shares strategies to help you protect profit and enhance customer experience. Watch it today to make sure you are getting charged correctly and manage the capacity risks that threaten to derail your performance.

Monitor, Pivot, Perform: Strategies for Unexpected Parcel Delivery Peaks

However, unlike the seasonal Black Friday and Prime Day spikes many shippers and carriers have mastered, the current parcel climate is yielding new challenges.

Home-bound customers aren’t answering the door for signature-seeking parcel delivery couriers. How does the FedEx and UPS driver complete deliveries at closed businesses? When parcel trucks are loaded to the roof and more e-commerce orders are filling the pipeline, essential supply shipments cannot stop and impede consumers’ medical, home office and home school needs.

During this non-standard peak period, communication is critical between shippers, carriers and customers. As the novel Coronavirus (COVID-19) situation evolves across North America, an organization’s proactive efforts to monitor, validate and optimize its small package program can improve efficiencies, maintain customer service and control costs.

Parcel Volume is Filling Networks

Limitations on passenger travel across international borders isn’t slowing the movement of goods into the U.S. Air cargo flights enter the country daily, and the express market is working as usual. Essential goods – medical, protective and cleaning supplies – are getting priority over non-traditional retail shipments, but Amazon’s move to add workers illustrates that fulfillment and service providers are focused on meeting the rising online demand for vital needs.

“UPS’s network planning and operations teams are experienced with adapting to changing conditions, and are developing contingency plans to address potential sources of disruption in our air and ground networks,” UPS Chairman and CEO David Abney said in a March 18 email to the marketplace. “Our teams are working to continue to serve the supply chain needs of businesses during this time, while keeping our employees and customers safe.”

Like organizations around the globe, carriers are focused on good hygiene within facilities and among employees, but they’re also focused on maintaining their own efficient operations. Packages destined for a location that is closed under nine days, will be held at the UPS/FedEx centers. However, if the delivery location is closed more than nine days, they are returning to the shipper.

The central issue here becomes two-fold:

  • Carriers don’t have storage for these packages. Many held packages are being stored in feeder units (trucks) and stay there until unloaded for scheduled delivery. If an urgent package needs delivery, shippers will likely have to resend product. 
  • If drivers are unable to deliver a package due to time constraints or buildings are closed, they are instructed to mark them “Emergency Conditions – COVID-19.” All of those packages will circumvent guaranteed service refunds.

Meanwhile, UPS and FedEx are easing requirements for physical signatures, and offering alternatives to customers meeting a driver at the door. For deliveries to high-density buildings closed to outside traffic, such as apartment complexes, service to lockboxes or other alternative pick-up points may become increasingly prevalent.

In this environment, it is important that shippers closely monitor and validate parcel service performance, especially within carriers’ complicated accessorial structures. Interior deliveries may not be feasible. Heavy weight packages, such as reams of paper for the home office, will generate additional costs. Be alert for carrier adjustments to rates and services during this non-standard peak period.

Nuances related to parcel delivery services can create new challenges for commercial shippers accustomed to operating in a business-to-business world. Responding to direct-to-consumer delivery demands can trigger unfamiliar shipping cost assessments. An experienced shipping provider can help implement drop-shipping programs that balance cost and service for shippers responding to home-bound consumers. That partner’s ability to monitor transportation activity also supports shippers’ proactive communication of delivery status or delays to end customers.

Monitor Fluctuations in Spend and Volume

Our team has spoken with customers experiencing a spike in online orders stemming from people staying home to reduce the risk of infection. As spread of the virus evolves, employee absence could jeopardize their ability to fulfill orders. Curtailment of non-essential shipments could further impact some organizations’ shipping volume.

It is important to actively monitor carrier spend levels to protect volume-based discount incentives. Earned discount thresholds offered in parcel carrier agreements are based on a 52-week rolling average. In the event of a slowdown, as new weeks of data are incorporated, the gross rolling average will decline and discount incentives will adjust downward.

For FedEx customers, this often results in an incremental change. The change for UPS customers could be more stark as a shipper’s spend levels diminish over time.

As the transportation environment continues to shift, it may make sense for some small package shippers to consider evaluating low-weight, multi-piece LTL shipments. Where warranted, transitioning those shipments to UPS Hundredweight or FedEx Multiweight can help drive revenue calculations.

If your company’s fluctuating parcel spend jeopardizes discount incentives, now is the time to have an honest conversation with account managers about the current situation, or consider exploring other carrier options. This can spur broader conversations that support improved cost management, including routing guides for outbound volume or billing practices that put cost control in your hands instead of your vendor partner.

Experienced parcel shippers can manage these program practices in-house. However, at a time when operational demands challenge many companies’ profitable performance, multi-modal transportation management experts using technology-enabled analysis can support parcel shipping optimization that enhances service and controls costs.

Parcel logistics leaders: Now more than ever it is important to make sure you get the best carrier rates possible. Companies pursuing peak fulfillment opportunities can leverage this non-standard peak season to their benefit while protecting customer experience.

Long-term Parcel Outlook

Don’t trust any crystal ball hype that you’re hearing in the marketplace. Nobody can predict what is happening tomorrow, next week or over the long-term. One thing is certain: there will be change.

This creates new opportunities to examine end-to-end organizational processes.

Digital transformation in recent years laid groundwork for the supply chain evolution many organizations are already embracing. Sourcing strategies, vendor locations and distribution network design are key elements in executives’ active conversations during this time of disruption. The prospect of financial incentives will drive more companies to diversify and reshore domestic production.

Transportation Insight manages supply chains for organizations of all sizes so they can focus on areas of their own expertise. Combining parcel invoice audit and payment, data management and analysis with decades of deep parcel industry experience, we help clients align their multi-modal transportation programs with carrier capabilities and customer demands.

In a dynamic, unpredictable marketplace, we’re here to lead you through efforts to adapt your current strategy, construct contingency plans for future disruptions and monitor your carriers performance. To make sure your small package shipping processes are delivering maximum value when it is needed most, schedule a parcel program assessment today.

Reverse Logistics: Charting a Course to Protect Profit

But in the real world, errors can happen without warning. From human errors in picking orders to wrong shipping labels applied to boxes, even the best logistics plans can face uncertainty. In fact, as more apparel shoppers buy various sizes and return what doesn’t fit, a perfectly processed shipment can still result in returned goods. That’s where the “Reverse Logistics” process comes in: returning items from the consumer back to the company with the goal of managing final disposition. 

Does your company have a solid reverse logistics plan? As customers demand more flexibility, it’s important now more than ever to consider how reverse logistics fit into your overall strategy.  

What is Reverse Logistics?


The term “reverse logistics” was first coined in a 1992 whitepaper written by James R. Stock, Ph.D., a professor at the University of South Florida, and published by the Council of Logistics Management (now known as the Council of Supply Chain Management Professionals). In scholarly terms, reverse logistics is defined as: “the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.”

Five years later, a Dutch research team would delve further into that category with their own paper, published in the European Journal of Operational Research. Titled “Quantitative models for reverse logistics: A review,” the team acknowledged the “recently emerged field of reverse logistics” was a new area of study, and “…the time seems right for a systematic overview of the issues arising in the context of reverse logistics.” 

As computing advanced, the study of reverse logistics changed from an operational and mathematical field to a technology-driven field. Dr. Stock revisited the topic in a 2002 article published in Harvard Business Review, writing: “There are many reasons for this trend—the rise of electronic retailing, the increase in catalog purchases, more self-service in stores, lower tolerance among buyers for imperfection—but few companies are doing the best job of dealing with it.” He also noted several companies that were handling reverse logistics well at the time, including General Motors and Volvo.

In short: Every business that ships goods from warehouse to the customer needs a reverse logistics plan. And with technology touching every aspect of our lives, a traditional approach may not be enough to keep customers happy. 

The Problem With Standard Reverse Logistics Strategy

Traditionally, the reverse logistics plan always began with a human touch. After receiving a damaged or incorrect parcel, the customer called a toll-free number and requested permission to return their product. If approved, a return merchandise authorization was issued, and the customer was free to return their product via the preferred shipping method. The returned product  then took a long journey from customer to distribution center to returns center where the product’s ultimate fate was determined. 

Technology has made this model entirely outdated. First, utilizing traditional methods can add unnecessary shipping costs, making a return even more expensive than a lost refund. In addition, going through each of these steps adds a manpower cost – one which requires paying a salary and a share of benefits. 

While these steps were necessary in a pre-Internet world, technology has rendered much of this process obsolete. The problem is that despite the leaps that provide a much more customer-focused approach, some companies are still doing things the old-fashioned way – and quietly losing money as a result. 

The Benefits Re-Focusing the Reverse Logistics Strategy

Today’s reverse logistics doesn’t require a staff of hundreds of people processing  returns from around the world to determine their final disposition. Instead, a re-focus of reverse logistics can save a company time, manpower and realize a reduction in shipping costs. 

By utilizing a technology-focused approach to reverse logistics, the returns process doesn’t start with a call center and toll-free number, but with an automated form leading a consumer down a guided path. The right forms can lead users down a focused course of action that has more accuracy than a voice call and that effectively pre-sorts items before they are inspected for disposition. 

Through this pre-screening process, companies can significantly save on shipping costs. Once the technology determines where the item is destined, a return merchandise authorization form and shipping label with the most cost-effective means possible is automatically produced. This sends the item to the appropriate return center, where a quick inspection can confirm the item condition and bundle it with other items on an LTL load. Utilizing technology, the company reduces the amount of trucks required for shipping, resulting in actualized savings. 

Finally, a process that once involved several steps and weeks becomes a streamlined solution. Technology-enabled management of the intake process frees your workforce to focus on value-driven tasks, giving you optimal productivity from your team. 

The Downside of Advanced Reverse Logistics Strategy

Of course, there are still challenges that can emerge in a holistic reverse logistics strategy. While technology is a great customer service enabler, it downsides can emerge as well. 

For example: a 22-year-old Spanish citizen was arrested in August 2019 on suspicion of returning boxes filled with dirt to a major online retailer. Instead of returning items, the scam artist weighed each box with items inside, and filled them to the same weight with dirt. He was accused of taking over $370,000 in fraudulent returns from the company. 

In this situation, the reverse logistics plan experienced an unforeseen issue. Automated inspection prior to disposition resulted in widespread fraud and benefit abuse. This is where the power of a trusted third-party logistics provider (3PL) comes in: through deep analysis of costs, benefits, gains and weaknesses, you can build an advanced reverse logistics strategy that will pass many common tests. 

How To Get Your Company Ready For Advanced Reverse Logistics 

If your reverse logistics process could benefit from a technology boost, it might be time to get a parcel program assessment from the leader in 3PL management: Transportation Insight. As your partner in transportation management, we can help you start preparing or fine-tuning a reverse logistics plan that utilizes technology to give you the competitive edge. Contact us today and get started on a strategy that prepares you for the future.