United Parcel Service Tests Saturday Delivery as Online Shopping Demand Surges

In order to cater to the increasing online shopping demand, United Parcel Service, Inc. recently decided to offer delivery services even on Saturdays, starting this summer at a few locations in the US.

In doing so, the company will also be able to compete with its business rivals who already offer delivery services on the weekends.

In the first stage, UPS will evaluate the demand of the services at a few destinations to justify the cost.

These locations include Philadephia, Atlanta, and Los Angeles, where Saturday delivery services will be monitored initially. The company is expected to receive good demand as most online customers want to receive deliveries of their goods at homes on weekends.

Furthermore, the current move will also allow United Parcel Services to better compete with its biggest rivals - FedEx Corporation, that delivers ground-based parcels on Saturdays, and US Postal Services that makes deliveries even on Sundays in some areas.

Industry analysts expect home deliveries and online shopping to surge in the future and may account for more than half of United Parcel’s total business by the end of fiscal year 2019.

Furthermore, US e-commerce generated a total sale of $343 billion during fiscal year 2015 with a compounded annual growth rate of 17% over fiscal year 2000. This trend is expected to continue in the future as more and more customers want to save time on shopping as well as conveyance costs when they go to a big store.

According to UPS’ expectations, its home package deliveries are expected to increase from the current 46% to 51% by the end of fiscal year 2019. This is also one of the reasons why the company is looking into Saturday deliveries, with an eye on future demand.

A Parcel Services spokesman reported: “We just continue to see more and more demand for e-commerce shipments.” This means that the company may launch more services to meet increasing e-commerce demand as the changing trend is expected to drag down the conventional way of shopping.

It is due to same surge in online shopping during the winter holiday season that parcel delivery services are usually short on staff, leading to less on time deliveries.

Although United Parcel Services, along with FedEx Corporation, hires additional staff at such times, the companies still lag to meet the greater parcel delivery demand during the winter holiday season.

Both United Parcel Services and FedEx also receive higher demand as compared to peak numbers in some high impact areas. Both companies strive to meet this demand in specific areas, which is why United Parcel announced plans to offer services even on Saturdays.

Source: BidnessEtc