Via UPS, Christmas Is Coming Late for Some Amazon Shoppers
Emily Coyle
It was a lucrative holiday shopping season for Amazon.com (NASDAQ:AMZN), but the e-commerce giant still left some shoppers disgruntled after Santa Claus failed to show up on time. According to Bloomberg, despite Amazon's promise that all of its ordered packages would be delivered by Christmas, some shoppers still suffered empty doorsteps on the eve of the big day, and now the largest online retailer is working to make it up to them.
For those affected by Amazon's inability to deliver packages the time, the Seattle, Washington-based retailer offered customers $20 gift cards and refunds on shipping charges — along with a promise that it would never happen again. Amazon doesn't take full responsibility for the shipping shortcomings, as it cites failures in the United Parcel Service's (NYSE:UPS) transportation network in addition to its onslaught of last-minute orders, but the company issued gift cards to compensate customers nonetheless, and promised to look into UPS difficulties.
According to Bloomberg, Amazon spokesperson Mary Osaka maintained in an e-mail that the company's own fulfillment centers processed customers' orders on time, while the UPS website said its volume of air packages exceeded its capacity before Christmas. UPS reportedly added 55,000 part-time holiday workers, leased 23 extra planes, and built a second trucking fleet to handle the seasonal package flow, but it is clear that its efforts still weren't enough, and Amazon shoppers paid the price. Now that online shopping is at an all time high, delivery companies are more busy than ever before, but it is the responsibility of the retailers to ensure that their deliverers can support its promises.
Now, a day after Christmas, the UPS will resume its normal schedule pickups and deliveries, distributing some holiday gifts a little late. Craig Johnson, president of Customer Growth Partners LLC, maintains that he is not surprised by the distribution buildup, as he explains via Bloomberg that, "You had a perfect storm of events from the consumer side, the retailer side, and the shipping side. At the last minute this year, a number of retailers extended their cutoff date to get there by the 24th. Normally those kinds of schedules are all kind of prepared or coordinated with the carriers."
At least now the UPS will know better for next year, as Forrester Research predicted in November that U.S. online holiday retail sales would climb 15 percent to a record of more than $78 billion, and as it turns out, they were right. UPS competes with its rival, FedEx Corp. (NYSE:FDX) for retailer support, but the latter's ground-delivery fleet is less than one-third the size of UPS' at about 32,000 vehicles, so it is really up to UPS' fleet of 101,000 signature brown trucks, vans, tractor trailers, and motorcycles to get the job done — and do it on time.
More From Wall St. Cheat Sheet:
Going Postal Just Got More Expensive
Amazon and Google Go Head to Head Over Online Shopping Space
Retail Report: Amazon's Bezos Wears This Year's Santa Hat