The rush before Christmas…the UPS elves are crazy busy!

Today’s Wall Street Journal documented the new, upgraded UPS service that is running full tilt to bring packages in before Christmas.  This is an on-going concern, after the debacle last year when UPS’s systems shut down in the face of massive capacity constraints driven by etailers promising delivery by Christmas.  The facilities were unable to cope with the last minute shopping rush that occurred, and has had to boost resources significantly to deal with this year’s massive shopping spree driven by millions of procrastinators (myself included).

Research in our BVL study showed that cost pressures are going up, but that the cost of transportation driven by the rise in small package home delivery is also driving costs up.  In fact, the article goes on to note that “home delivery from online shopping has been a rag on UPS profitablity in the US.  And with e-commerce soon to account for half of U.S. packages, the company is trying to automate and digitize operations to boost profitability and improve productivity.  In fact, forecats are that over 34M pages will be delivered on December 22 (today), and a total of 585 M in December.

Last month in Atlanta I spoke to a UPS executive who shared with me his insights on this issue.  He mentioned that UPS was hiring extra workers, extra truck drivers, and extra part-time workers to be able to work in the warehouses.  He noted that UPS was going to use cellphones to track workers, using built-in GPS technology.  The WSJ article also mentioned a new automated sorting sytem that will simplify and reduce the need to skilled workers.  This is part of the overall trend of severe shortages for warehouse workers being experienced in the industry, not to mention the even worse problem with truck drivers…however the new system has been experiencing kinks with the automated chutes and cameras inside the warehouse.

Let’s hope the elves make it in time for Christmas..