Shippers Struggle with Holiday Deliveries

Shippers Struggle with Holiday Deliveries

December 23, 2019

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.


Video Spotlight:


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

Discussion Questions:

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 Continue reading

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Amazon Optimizes Warehouse Space

Amazon Optimizes Warehouse Space

December 22, 2019

As the holiday buying season is underway, Amazon is revising its warehousing system.

As we previously shared, in an effort to cut Prime shipping time from two days to one day the company invested heavily in 2nd quarter 2019 to improve transportation and warehousing. Part of the warehousing problem relates to independent merchants that are using Amazon for fulfillment.  Over half of Amazon sales are from these independent merchants.

Amazon has raised the fees charged to these independent merchants to encourage a reduction in inventory, trying to keep slow-moving items out of their distribution centers.  Because many of these merchants are concerned about the fees, Amazon may not have enough inventory on-hand with holiday sales looming.

Thus, Amazon is implementing Amazon Storage and Replenishment.  Merchants can now store products to replenish Amazon’s distribution centers from nearby warehouses.  The hope is to allow merchants a cheaper storage option in order to keep inventory low in Amazon’s distribution center, but yet not run-out of merchandise that might result in lost sales.


Video Spotlight: Amazon is making one-day shipping the new standard for Prime members


This post is based on the Bloomberg article, Amazon Tests Cheap Warehouses to Make Continue reading

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