UPS is primed for Peak Season activity

Last week’s UPS third quarter earnings call was as busy as it gets in many ways. Not only did the transportation and logistics bellwether talk about its quarterly results, which were very strong to be sure, it also talked about its planned 2018 rate increases, a recent acquisition, and, not to be overlooked, its Peak Season preparation.

It is the last item, which, in some cases, may very well be the most interesting, given that the calendar now reads November, and the holiday push is here as consumers take the malls, both online and physical, to get things going.

But for UPS and many others, things have been going for a while now, and that really becomes clear when you take a look at the statistics they issued relevant to Peak Season and holiday preparation.

Some of these statistics include:

• an estimate of more than 750 million packages delivered globally by UPS in the 25 days between Thanksgiving and New Year’s Eve, which would mark a new record and top last year’s output by around 5%;
• 17 of the 21 holiday delivery days before December 25 are expected to top 30 million delivered packages;
• through its launch of UPS Saturday ground pickup and delivery service, customers in roughly 4,700 U.S. cities and towns will have 5 additional ground pickup and delivery days between Thanksgiving and Christmas; and
• to meet increasing demand, UPS is building new facilities and enhancing existing ones having recently completed four new and expanded facility projects that will create around 1 million square-feet of additional automated operations space in 2017, while package sorting and delivery capacity is heading up by around 6% annually

It goes without saying that this is an assembly of impressive efforts being made by UPS to ensure things go smoothly this holiday season. But there are other statistics, too, especially on the personnel side, with UPS recently stating it plans to employ 95,000 temporary seasonal staffers for positions ranging from drivers, delivery helpers that ride with drivers, package sorters, and loaders.

On the company’s third quarter earning call last week, UPS Chief Sales and Solutions Office Kate Gutmann said that UPS’s peak strategies are designed to efficiently and reliably serve all UPS customers, whether those who experienced the highest seasonal spikes in demand, to small and medium-size customers, as well as our B2B customers like those in healthcare.

“The UPS team has worked throughout the year to prepare for the e-commerce growth we anticipate this year,” she said. “At UPS, we're focused on delivering a successful peak season for customers and investors through more collaboration, more capacity, better control, and a strong commitment to service. First, we're focused on improved collaboration with customers for better forecasts, so we can collectively smooth work across the network. We are helping customers optimize the experience they provide their customers, from the first click to the final delivery. More extensive collaboration this year will better align UPS solutions and capacity with seasonal promotions and fulfillment strategies. We work closely to obtain daily shipping estimates by location and even by product. We've built operating and communication plans that allow us to respond to changes quickly.”

Being able to adjust and adapt during the most hectic time of the year is critical, and based on Guttmans’s comments it is more than clear UPS is up to the challenge.

That was echoed on the earnings call by UPS President of U.S. Operations Myron Gray.

“There are several factors that give us confidence in our ability to perform this peak season,” he said. “Considering the tremendous amount of time that's been spent with our customers to develop accurate forecasts, preparing to hire and train seasonal staff, as well as expanding our permanent and seasonal capacity, we believe that Saturday deployments of our operations will have a tremendous impact on this peak. It'll give us five additional delivery days. We're planning to process 40% more volume on Saturdays, and 80% of the volume we plan to deliver over the weekends will be through the facilities where we've already established Saturday operations.”

No matter how you look at it, UPS looks to be ready for whatever challenges lie ahead for the 2017 Peak Season, or holiday rush, if you will. With shopping activity heading up at a feverish clip, the planning and preparation is likely to pay off.