December 26, 2013

Amazon refunds shipping, offers gift cards after UPS misses Christmas deliveries

The delivery service cited overwhelming volume for its inability to get all packages to customers before the holiday.

By Craig Trudell
Bloomberg News

Amazon.com, the largest online retailer, offered $20 gift cards and refunds on shipping charges after United Parcel Service said overwhelming volume left it unable to deliver some packages by Christmas.

click image to enlarge

A UPS driver makes a delivery earlier this month in Stone Mountain, Ga.

The Associated Press

Amazon cited failures in UPS’s transportation network in messages to customers, saying its own fulfillment centers processed customers’ orders in time for holiday delivery.

“We are reviewing the performance of the delivery carriers,” Mary Osako, an Amazon spokeswoman, said in an e- mail.

UPS, the world’s largest package-delivery company, said in a service update on its website that the volume of air packages exceeded its capacity immediately preceding Christmas.

“UPS is not making pickups or deliveries on Christmas Day and will resume normally scheduled service on December 26,” it said in the update.

U.S. online holiday retail sales were projected to climb 15 percent to a record of more than $78 billion by Forrester Research Inc. in a report published last month.

UPS expected to ship more than 132 million parcels globally during the week before Christmas, according to the cover story for subscribers to Bloomberg Businessweek in its Dec. 23 issue.

Spokesman David Tovar of Wal-Mart Stores Inc. and Jen Johnson of Kohl’s Corp. didn’t immediately respond to e-mails seeking comment on the Christmas holiday. Johnna Hoff of EBay Inc., Kathleen Waugh of Toys “R” Us Inc. and Laura Jones of Zulily Inc. didn’t immediately respond to e-mails and calls seeking comment. An e-mail to UPS’s public-relations department and a call to Natalie Black, a spokeswoman, weren’t immediately returned.

UPS has long dominated the holiday shipping business in the U.S. because of its fleet of 101,000 signature brown trucks, vans, tractor trailers and motorcycles, according to Bloomberg Businessweek. Its rival, Memphis, Tennessee-based FedEx Corp., has more jets though its ground-delivery fleet is less than one- third the size, at about 32,000 vehicles.

In October, UPS and FedEx announced their holiday shipping forecasts. FedEx said it would carry more than 85 million shipments in the first week of December. UPS predicted it would deliver 129 million packages that week, and would see a second holiday rush during the week before Christmas.

UPS added 55,000 part-time holiday workers, leased 23 extra planes and effectively built a second trucking fleet to handle the seasonal package flow, according to the cover story.

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