The many reasons for Christmas delivery delays by UPS

An article in Supply Chain Digest (Jan 6, 2014) available at (http://www.scdigest.com/ontarget/14-01-06-2.php?cid=7717) discusses reasons for the delivery delays of Christmas orders handled by UPS. While UPS anticipated an 8% increase in shipment volume, and added 55,000 employees and 23 aircraft, ecommerce volume surged 63% with many merchants shifting to air shipments due to their own fulfillment delays. The mix of air and ground hurt UPS because of their inherent lead time differences – with UPS having a a smaller fleet size than FedEx. Finally retailer offers to customers to place orders as late as 11 pm on Dec 23 and receive delivery by Christmas is also identified as a reason for delays ad lack of air capacity to complete deliveries by Christmas. What should UPS do to plan for such uncertainties next Christmas ? Should UPS check against available capacity before accepting order so that customers are aware of order delays before they place orders ? Should retailers be offered the option to shift to other delivery providers once UPS’s has reached its capacity ?

About aviyer2010

Professor
This entry was posted in Ecommerce, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

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