06 Sep Delivering on the Holiday Challenge — Part 2
As the holiday peak shipping season nears and shippers are planning how best to manage it, the holiday surcharges announced by UPS may be prompting consideration of alternate carriers for holiday shipments. UPS, as you may recall, will add a 27-cent charge on all ground packages sent to homes between Nov. 19 and Dec. 2 — the weeks encapsulating Black Friday and Cyber Monday. And from Dec. 17-23, UPS will charge an extra 27 cents for each ground shipment, 81 cents for next-day air and 97 cents for two- or three-day delivery. Both FedEx and UPS have increased their oversize shipment surcharges as well.
Potential alternatives include USPS and USPS Parcel Select services. UPS will be adding a 36-cent holiday surcharge to SurePost shipments so other hybrid services such as FedEx SmartPost, DHL eCommerce Expedited/Expedited Max, Newgistics or others may be better options. Clearly, the concern is that with all these services along with UPS SurePost funneling into the Postal System, is USPS prepared to handle huge volume increases from these Parcel Select carriers along with their own volume increases?
According to USPS Chief Operating Officer, Dave Williams, USPS has been preparing for the holiday peak since last January and said that USPS “is depending on peak season for growth” and said it was planning for “flawless performance and really good service” during the peak season.
USPS has invested in handling high growth by implementing processes changes and installing additional equipment that includes new sorters and 150-dimensional scanning machines. In addition, 13,300 vehicles which were scheduled to be sold will be retained until after the peak season.
USPS will also be using its Network Operating Command Center (NOCC) to help monitor and resolve issues. Williams said that front line managers have access to data and tools to focus on opportunities within the operation. He said USPS is “willing, ready and able to take all the volume” it is given.
Peak season planning is a year-long process at all major carriers. Only time will tell how effective each is at maintaining service levels with volume spikes that can reach 60% over average daily volume. USPS will undoubtedly see volume spikes during the holiday, but much of that increase may be at the local level where Parcel Select (eg. SmartPost, SurePost, etc.) packages are inducted into their system. Of course, for these hybrid services the peak volumes have to be effectively handled by both the originating carrier and USPS. Depending on two systems to deliver packages does introduce additional points of potential failure, but it appears all players are ready for the onslaught.