Why the Postal Service has been losing money for years
New York (CNN Business)It’s about to get much more difficult and more expensive to get packages delivered by Christmas.
FedEx (FDX), United Parcel Service and the US Postal Service are handling a record number of shipments because of a huge increase in online purchases during the Covid-19 pandemic. And the current surge in Covid cases is compounding problems for the delivery services and their employees, who are among those getting sick.
As if that weren’t keeping them busy enough, a major winter storm is about to hit the Northeastern United States.
Despite the added strain, all three services are still achieving a better than 90% on time delivery record according to figures from ShipMatrix, which tracks shipments for shippers.
“But every day you procrastinate, you’ll pay more for shipping and increase the chances you won’t get your packages in time,” said Satish Jindel, president and founder of ShipMatrix.
The deadlines for less expensive ground shipments to arrive by December 24 passed for all the delivery services earlier this week. And even those packages that beat the deadline aren’t guaranteed to get there by Christmas Eve.
The US Postal Service package volume could be up by a third compared with last year, in part because other delivery services are hitting their peak capacity, said Postmaster General Louis DeJoy in a recorded message for his employees this week.
“Our competitors are likely to get more volume than they can handle, which means we could be getting a lot of overflow,” he said.
The Postal Service this week acknowledged that it’s having problems with the unprecedented amount of packages, and it urged customers to send both packages and Christmas cards as soon as possible to get them delivered in time.
“While every year the Postal Service carefully plans for peak holiday season, a historic record of holiday volume compounded by a temporary employee shortage due to the Covid-19 surge, and capacity challenges with airlifts and trucking for moving this historic volume of mail are leading to temporary delays,” said the service’s statement. “These challenges are being felt by shippers across the board.”
Both UPS (UPS) and FedEx are working to distribute the Covid-19 vaccine, but the companies said that effort shouldn’t affect most holiday deliveries.
FedEx said the vaccines are moving through a dedicated part of the company’s overnight service, while most online purchases and individual parcels move through its lower-cost ground transportation network.
“The distinction means that each will have the dedicated resources they need to deliver quickly and safely,” said FedEx spokesperson Janna Hughes.
UPS also said its vaccine deliveries are not affecting the ground shipments by which most holiday packages move.
The storm hitting the Northeast this week shouldn’t cause a problem for most Christmas deliveries, though it could delay deliveries scheduled for this week said ShipMatrix’s Jindel. But if another storm hits late next week, it could cause a repeat of the problems seen in 2013 when a late season storm caused many online purchases to not get delivered by Christmas.
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