UPS Delivers 36 Million Packages On 22 December; Double The Normal Deliveries

UPS Delivers 36 Million Packages Tuesday, Double Normal; Sign of Huge Holiday Sales?

Double Normal

Christmas is just over a day away. Package delivery is at record volumes. Does that portend a huge Christmas shopping season?

Before addressing that question please consider the Supply Chain article UPS Delivers 36 Million Packages - Double Normal. 

 UPS expected to deliver 36 million packages yesterday, double its normal volume, as online retail sales continue to grow during the Christmas season.

The parcel service has hired an extra 95,000 seasonal workers to help with the expected onslaught of packages, said Fortune magazine.

The company said it expects to deliver some 630 million packages between Thanksgiving and the end of December, up 10.3 percent from 2014.

Sign of Huge Holiday Sales? 

A huge surge in overall sales remains to be seen.

The Supply Chain headline "UPS Delivers 36 Million Packages - Double Normal" sounds exciting, but that is for a single day, not the entire season. The hype is not apparent until one dives into the details.

Overall package delivery is up a very healthy 10.3% but is that at the expense of in-store sales?

To be sure, there was a splurge of last minute shopping, including some by me.

I can point out some gross inefficiencies at the micro-level.

I ordered four items a few days ago, of the exact same undisclosed nature (because my wife might be reading this and the presents are for her), all from the same store, and all in the same online order. I received not one package, but four packages, in four different deliveries (morning and afternoon over two days). The deliveries were all rushed, with no delivery charge.

Somewhere in this supply chain, there appears to be some gross inefficiencies.

Personal anecdotes aside, until we see actual retail sales reports, I am sticking with my forecast that increased online sales will not hugely overpower an otherwise lackluster holiday shopping season.

Mike "Mish" Shedlock

Read more at http://globaleconomicanalysis.blogspot.com/2015/12/ups-delivers-36-million-packages.html#f806WLgbtstrouFA.99