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Thursday, October 8, 2015

UPS still staggering under holiday crush

Holiday spirit turned to rage today as irritated consumers dealt with a third day of broken promises while UPS, the world’s largest package delivery company, staggered to recover from a holiday crush that caught the service unprepared and left thousands of people short of gifts under their Christmas trees.

The delays certainly cost UPS good will, and analysts say they could also cost the company business if customers grow distrustful and choose other ways to ship.

The poor performance will make consumers think twice next holiday season about delivery promises and could boost the popularity of “buy online, ship to store” options that many stores offer, says retail brand strategy expert Ken Nisch, chairman of JGA, a firm that represents clients including Macy’s, Godiva and The North Face. And retailers will have to reconsider guaranteeing delivery they can’t control, he says. Amazon, the No. 1 online retailer in the week before Christmas, as measured by Experian Marketing Services, fulfilled its end of the bargain by packing its shipments and delivering them to the carriers “on time for holiday delivery,” Amazon spokeswoman Mary Osako said.

“We are reviewing the performance of the delivery carriers,” said Osako, who noted that Amazon refunded shipping charges for delayed packages and offered customers a $20 gift card for the inconvenience.

As irate customers vented their anger on the UPS Facebook page, the company responded to many by apologizing and asking for shipping information to get the packages on the right track.

UPS drivers did not deliver on Christmas Day, but sorters worked Christmas afternoon and evening to load planes at UPS’ air hub in Louisville. Even so, UPS said, some packages that were promised to arrive before Christmas still wouldn’t arrive until Friday.

“We’re making every effort to get all the packages delivered,” UPS spokeswoman Natalie Godwin said.

“Nearly all” the delayed packages would get to their destinations Thursday, she said.

UPS, which delivers more than 16 million packages a day to 220 countries, had expected an 8% increase in volume for the peak holiday season.

“Demand was much greater than forecast,” Godwin said.

She did not say how many packages were affected by the delay.

UPS spokesman Jeff Wafford said some customers who paid for two-day delivery or faster may get refunds of the shipping charges.

Tom Boyer, 45, of Daly City, Calif., was among those with delayed packages who reached the company via Twitter and sent his tracking number. Boyer got hit with a double whammy of missing packages for his Dec. 22 birthday and for Christmas. A computer he ordered for his family, sent by UPS overnight delivery last week, and a birthday gift sent via UPS by his brother, an Amazon Prime member in Alaska, have yet to arrive.

Boyer tried e-mailing, tweeting and phoning UPS. He thought he might be able to go to the nearby UPS depot and fetch his packages, but he couldn’t reach any UPS employees. On Thursday, he received an e-mail saying his items would be delivered Thursday and promising him an e-gift card for his trouble. Then, UPS called to say it might be a few more days.

“I think that this has not been handled in a professional way from the beginning of the problem until now,” Boyer said. “I think they are misleading customers.”

Boyer first noticed the problem on Dec. 20. Each time he checked the tracking system online, the delivery date changed.

“The delay kept growing,” he said. “That’s what’s so frustrating. We keep seeing a new promise every day, and the promise isn’t fulfilled.”

Failing to let consumers know about the delays until Christmas Eve “shows a high degree of disregard for their customers,” Boyer said.

“Be honest,” Boyer said. “Tell us how big the problem is. Tell us realistically when we can expect our packages.”

Boyer had better luck with the U.S. Postal Service.

“Everything I sent to my brother, Peter, in Alaska, I sent via the U.S. Postal Service,” Boyer said. “It all arrived early.”

Postal Service mail carriers delivered mail and packages in many places on Christmas Day to keep up with higher-than-expected package volume, the Postal Service said in a statement. Volume was up 19% from the same period last year.

Carriers worked on Christmas “to make sure everyone enjoyed their holiday,” the Postal Service said. “Their dedication and resolve is commendable.”

The Postal Service expected heavy package volume to continue throughout the week.

FedEx “experienced no major service disruptions in the week before Christmas, despite heavy volume,” but there were “isolated incidents” of undelivered packages, company spokesman Ben Hunt said in an-email Thursday,

Online retailers nationwide had lured customers to buy holiday gifts just two days before Christmas with promises that their purchases would arrive by Christmas Eve.

About a third of retail companies offered free or upgraded expedited shipping promotions that gave their customers until Saturday, Dec. 21, to order for Christmas delivery, and 17% pushed it to Monday, a National Retail Federation survey found.

Retailers pushed their delivery deadlines so close to Christmas that it gave consumers a “false sense of security,” said strategy expert Nisch.

On Thursday, retailers scrambled to track their customers’ delayed packages.

“We are working with FedEx and UPS to understand the situation,” Macy’s spokesman Jim Sluzewski said. “So far, it appears only a small number of Macy’s deliveries were affected.”

Nordstrom sent an e-mail Thursday apologizing to customers whose orders were delayed. The store said it met its obligation to get the items to its shippers on time. The company said it would reconsider its business with UPS.

“On behalf of the entire team here at Nordstrom, I sincerely apologize for letting you down,” Jamie Nordstrom, president of Nordstrom’s online operation, wrote. “While we are dependent on our shipping partners to hold up their end of the bargain on getting your orders to you, we also realize that we are accountable for meeting your expectations and take responsibility for what happened here. …. Unfortunately, as you may have heard, the UPS delivery network was overwhelmed, and they were not able to meet their commitment.”

Donna Leinwand Leger and Jayne O’Donnell, USA TODAY

Contributing: Mark Boxley, The Courier-Journal in Louisville

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