After the 2013 peak holiday season, e-commerce shoppers took to the phones and social media to tell e-tailers, and, ultimately express transportation companies, how they ruined Christmas. As it turns out, Santa actually drives a big brown truck, and he failed to get a substantial number of gifts under the tree before Christmas morning.
Analysts have hashed and rehashed all the reasons why UPS, FedEx, and other parcel carriers dropped the ball last year. Inaccurate forecasts, overreaching delivery promises from retailers, inclement weather, and a last-minute influx of packages generated from online orders top the list. Not to mention that consumers are conditioned by e-tailers and expedited carriers to expect delivery almost in real time, and even before they order.
But UPS believes it has taken appropriate steps to make sure 2014 goes differently.
“We are ready to deliver during the 2014 peak season,” said Mark Wallace, UPS vice president of engineering, U.S. domestic operations, during a press tour of the UPS Worldport facility in Louisville, Ky. UPS invested $500 million in improving its capacity and processing abilities for peak season and beyond.
One noticeable improvement involves Black Friday. While UPS air cargo operations are always running on the day after Thanksgiving, the UPS Ground crew typically gets a holiday. No longer. This year, drivers will be working off their turkey meal by picking up and delivering packages on the biggest shopping day of the year in order to get a jump on what will be another short peak season.
More drivers will also be making those deliveries. UPS increased its package car fleet by 10 percent, or about 6,000 brown trucks. Twice as many of those drivers now have access to UPS’ On-Road Integrated Optimization and Navigation (ORION) routing software, which optimizes pickup and delivery routes. About 45 percent of the company’s drivers will have ORION capabilities before 2014’s peak season begins.
But it isn’t all about how many trucks are on the road. Packages have to get to the trucks first. UPS added 50 regular sorts at its hubs, increasing capacity by about five percent. It also opened three new automated hubs in Richmond, Calif., and Dallas and Laredo, Texas—all of which were problem areas during last year’s peak season.
Mobile DCs Ease Tight Capacity
Additionally, a series of new mobile distribution centers (MDCs) increases flexibility in the company’s network. The MDCs move by rail, and can be set up in a parking lot to act as a temporary home for as many as 90 additional trucks, helping to ease tight capacity in any region on relatively short notice.
Yet much of UPS’s plan rests at the Worldport itself. On Super Weekend (the weekend before Christmas), four extra sorts are scheduled, essentially making the sort schedule run around the clock. And with more than 900 staging positions for trailers going online before peak (bringing the total to about 1,500), Worldport will act as more of a ground hub than ever before.
In addition to the physical enhancements, UPS made significant investments in technology. The company’s focus has been on improving visibility of incoming shipments; and prioritizing express, perishable, and time-sensitive shipments.
UPS is also working with shippers, gathering data and trends to improve the accuracy of 2014 peak volume forecasts. Upgrades to the UPS My Choice program should allow receivers to more accurately track and direct shipments.
Will these improvements be enough to get all of those packages underneath trees by Christmas morning? UPS says they will. Only time will tell.