Carriers Face a Difficult Holiday Season

Carriers Face a Difficult Holiday Season

In 1941, Franklin D. Roosevelt signed a joint resolution in Congress to change Thanksgiving to be celebrated on the Fourth Thursday in November. This year, that Thursday fell on the latest possible date, November 28th, leaving only 26 days until Christmas.

Not since 2013 have there been so few days between the two holidays.

The Difference This Year

Besides the time crunch, there are some distinct changes to the delivery landscape this year – their impacts will really not be known until after the holidays.

More Packages Than Ever

For the last decade, there has been a steady increase in the parcels handled between Thanksgiving and New Year’s Eve, this year is no different, compounded with the shortened window and even greater customer expectations, carriers will be feeling the pressure like never before.

Amazon Takes on More Deliveries

If you live in the United States, you have probably noticed a steady increase in Amazon trucks and vans driving around. The company has been moving forward full steam with its plan to take over its own last-mile (and, eventually, all deliveries). This year, Amazon has also promised 1-day package deliveries, which will further complicate their holiday shipping.

Amazon has a great advantage over other carriers in this department, cash. During this holiday season alone, Amazon plans on spending $1.5 billion on creating greater efficiency and enabling faster delivery to end-customers. While they may lose money in the short-term, Amazon is known for its long-term vision.

A Changing Retail and Delivery Landscape

The last decade has seen one company up-end nearly every industry it’s entered – Amazon. Both retailers and carriers have often been caught on their backfoot when it comes to Amazon’s innovations. From ultra-fast delivery to the sheer scope of Amazon’s marketplace, the company has been slowly changing the entire landscape.

This holiday season, retailers and carriers are looking to double-down on the competition with Amazon.

Amazon’s 1 and 2-day shipping is no longer a unique offering, it is now being offered by other retailers, such as Walmart. Target is another retailer that has begun offering faster delivery with its 2-day option.

These offerings have impacts on carriers, too. Actually delivering on the promise of 1 or 2-day shipping has been a massive challenge for carriers, particularly during the peak season between Thanksgiving and New Year’s. Carriers are investing billions of dollars into their networks in order to meet the new expectations put upon them. UPS, for example, completed a $300 million expansion of its main sorting and distribution hub in Kentucky. This was only a fraction of UPS’s master plan that involves billions of dollars to create “super hubs” across the United States with the goal of increasing throughput by 30-35%.

Intelligent Audit provides its clients with a global, all-mode transportation audit, recovery, freight payment, and business intelligence reporting partner.

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