In 2019, overall shipping volume has increased 21% for the holiday season compared to 2018. Cyber Monday and Black Friday occurred later this year, which has contributed to the lower on-time delivery rate.
FedEx’s on-time delivery rate has decreased from 77% to 68% this year. Likewise, UPS has gone from an 86% to an 80% on-time delivery rate.
- Holiday package deliveries may not arrive in time for Christmas (CBS Evening News)
- Amazon blocking 3rd-party sellers from using FedEx ground shipping (ABC News)
- E-Retail: The Last-Mile Problem (California Management Review)
This post is based on the CBS News article, Shipping companies struggle to deliver holiday packages on time, by Vladimir Duthiers, December 19, 2019, and the YouTube videos listed in the Video Spotlight. Image source: William Potter/Shutterstock
1. How important is it for a 3PL carrier to have an on-time delivery rate comparable to their industry rivals?
Guidance: Ask students to consider that Amazon no longer works with FedEx. Imagine how FedEx’s on-time delivery rate would decrease if added package volume from Amazon were being carried.
Students may start to see the decision by Amazon to drop FedEx could possibly be related to on-time delivery rates considering Amazon is intent on one day delivery as a new strategy.
2. Ask students to conduct a web search on growth of e-commerce sales. How does this growth impact on-time delivery going forward? What do they suggest companies consider doing to improve on-time deliveries?
Guidance: Last-mile delivery is crucial to improving on-time delivery rates. The question is how to best go about this step. Amazon is taking the lead in handling this to make one day delivery operationally effective. Can other companies learn and apply some of what Amazon is doing? Should companies create more distribution channels or locations to better meet consumer demands for timely delivery? This is a good question to consider the limits of delivery speed with today’s infrastructure and technology.