FedEx and UPS took plenty of heat last year for failing to get an estimated 2 million packages delivered in time for Christmas. But so far, it appears the two major carriers are doing a better job this year of helping Santa get gifts under the tree on time.
ShipMatrix, a logistics software firm, analyzed the on-time delivery rates of FedEx and UPS during Thanksgiving week, and each carrier saw significant improvement. The chart below shows how FedEx and UPS compare on their "raw on-time delivery service." This is a measure in which ShipMatrix does not factor in weather-related delays or snags such as an incorrect address or a recipient being unavailable to accept their package. In other words, it's a measure of how well the carriers are delivering packages purely on their own merits.
FedEx notched a 91 percent on-time delivery rate, compared to 83 percent in the same week last year. UPS achieved a 95 percent on-time rate, compared to 89 percent last year.
"The carriers are at the top of their performance level," said Satish Jindel, president of ShipMatrix.
The improvement comes as both carriers stepped up their efforts this year to avoid a repeat of last year's debacle. FedEx hired 50,000 seasonal workers this year, an increase over the 40,000 it hired last year. UPS has said it plans to bring on up to 95,000 temporary workers, compared to 85,000 in 2013.
In addition to hiring more workers, FedEx and UPS have been pushing retailers to give them more accurate forecasts for what volume of packages they'll be shipping on what days. Jindel said that inaccurate forecasting was a crucial reason for the delivery failures at the end of the Christmas season last year: Retailers badly underestimated how many packages they'd be putting in the shippers' pipeline.
Major retailers have said they worked hard to get it right this year: A Target spokesman said the big-box retailer had "more detailed conversations" this year with the carriers about their expected package load. Wal-Mart, meanwhile, started providing holiday shipment projections back to the carriers back in August--a full three weeks earlier than it has in the past.
This data set only covers the period of Nov. 23 through Nov. 29, so many of the online purchases made during Black Thursday and Black Friday promotions would likely have been made too late in the week to be included in this data set. Data for the following week, which ShipMatrix plans to release soon, should give us a better idea of how the retailers and carriers held up during the busiest online shopping days of the year.
But this data is still instructive in that many retailers began their so-called Black Friday sales earlier in the week, likely luring many holiday shoppers to start nabbing gifts early.
Based on the carriers' holiday season performance to date, ShipMatrix has a forecast that is sure to cheer shopping procrastinators: FedEx and UPS, it predicts, will achieve an on-time delivery rate of 95 percent or better on Christmas Eve.