Companies express confidence in timely deliveries despite COVID-19 Christmas surge

Companies express confidence in timely deliveries despite COVID-19 Christmas surge
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Retailers across the country have expressed confidence that delivery services are up to the task to meet higher than average demand over the holidays as more people turn to online shopping amid the coronavirus pandemic. 

With in-store foot traffic reduced due to lockdown measures and other coronavirus restrictions as the country topped 14 million infections on Thursday, retailers have focused on attracting customers online. 

However, this has prompted some concerns among customers on whether companies will be able to keep up with orders and deliver gifts in time for Christmas. 

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Adding to the problem are the restrictions keeping many people from traveling to see their families, meaning many are relying more than ever before on UPS and other companies to deliver their gifts.

On Black Friday, American shoppers spent a record $9 billion on goods from U.S. retail websites, according to Adobe Analytics, a 22 percent increase from 2019.

According to Reuters, latest industry estimates showed Cyber Monday to be the biggest online shopping day in history for the U.S., with up to $11.4 billion in sales. 

Several companies have benefited from this surge, including those that sell products on Amazon, which announced Tuesday that independent businesses on its platform received more than $4.8 billion in sales worldwide from Black Friday to Cyber Monday. 

The company said in a press release that this revenue marked a more than 60 percent increase from this time last year, with more than 71,000 small- and medium-sized businesses around the world surpassing $100,000 in sales to date this holiday season. 

Amazon said that amid the coronavirus pandemic, it is seeing “record demand” from customers, making it the company’s “biggest holiday season to date.” 

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In order to satisfy the delivery over the busy holiday season, Amazon said in a statement to The Hill that it is adding “new transportation capacity, hiring 100,000 new full- and part-time employees, plus an additional 100,000 seasonal employees to supplement our current workforce, and putting more selection in fulfillment centers closer to customers.” 

“We deliver for our customers every day and we’ll continue to do so this holiday season,” the tech giant added in the statement, writing that the additions have been possible “because of the sophisticated and innovative network we’ve been building for over twenty years.” 

However, the surge in online orders has placed pressure on the existing capacity limits of some delivery companies. 

In October, The Wall Street Journal reported that both FedEx and UPS had told some of their largest shippers that most of their shipping capacity had already been claimed, and that any extra trailers with holiday orders would have to wait to be picked up. 

“There will be days within the holiday season where the industry will be over capacity,” FedEx Chief Marketing Officer Brie Carere said in an interview at the time.

According to ShipMatrix Inc., a software provider that analyzes shipping data, the combination of holiday shipments and continued orders of household essentials amid the pandemic is expected to lead to a surplus of about 7 million daily packages between Thanksgiving and Christmas. 

This week, Journal reported that UPS told drivers across the country to stop picking up packages from six retailers, including Gap, Nike, L.L. Bean and Macy’s, in order to keep up with demand and maintain high performance during the holiday season. 

In response to the report, a UPS spokesperson said in a statement to The Hill that “UPS continues to work closely with our largest customers to steer volume to capacity and ensure the UPS network is reliable for all customers.” 

“We’ve worked with our large retail customers to ensure they are aware of how much capacity is available to them,” the spokesperson added. 

The statement said UPS had agreed on specific strategies with its larger customers in order to meet demand, including “shifting package volume away from the heaviest demand shipping days, fully utilizing weekend capacity, and aligning promotional strategies with capacity.” 

“If demand exceeds planned allocations, we will work with our larger customers to ensure the volume gets picked up and delivered as more capacity becomes available in our network,” the spokesperson added. 

Companies reportedly included in the UPS policy shift do not anticipate any major impact to the timely delivery of their products. 

Gap, in an emailed statement to The Hill, said it was “very happy with the performance of our parcel delivery network following the high cyber week demand.” 

“Knowing the unique constraints the industry is facing this peak season, we worked with our carriers early on to collectively build a strategic plan of execution - which includes dynamic pickups at stores,” the statement added. “We have been very satisfied with the level of partnership and commitment we have received from our carrier base, and especially that of UPS, and expect that to continue through the holiday season.”

While L.L. Bean did not respond to The Hill’s request for comment, the clothing company said in a statement to the Journal and Bloomberg that “while there have been some delays, primarily at a few of our retail stores, they [UPS] are actively picking up packages from our warehouse facility and our retail locations daily,” adding that UPS “continues to be a great partner.” 

A Nike spokesperson wrote in an emailed statement to The Hill that the sportswear maker expects “the majority of these orders to meet estimated delivery dates and are communicating with consumers any changes in delivery.”

Meanwhile, a Macy’s spokeswoman told the Journal, “We’re actively working with UPS to best manage customer deliveries.” Macy's did not respond to The Hill's request for comment.

Macy’s, along with several other retailers, has included updated guidance on when customers should order products to ensure they arrive by Christmas, as well as Hanukkah and Kwanzaa. 

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Apple, which has promoted the new iPhone 12 among its array of holiday products, has broken down by item the recommended order deadline in order for their customers to receive the products by Dec. 25. 

The multinational technology company is also promoting no-contact delivery and pickup options amid the pandemic.