UPS and FedEx Blamed for Missing Christmas Gifts

UPS Shipping

United Parcel Service (NYSE:UPS), FedEx (NYSE:FDX), and Amazon (NASDAQ:AMZN) are apologizing for delayed shipments that left those on Santa’s “nice” list without their gifts on Christmas morning. Livid parents took to social media to air their grievances, tweeting things like, “@UPS ruined my Christmas!!!!” According to a report from Reuters, the incident could open up room for more competition in the shipping industry, which is currently dominated by UPS, FedEx, and the U.S. Postal Service.

UPS and FedEx both pointed to bad weather and overloaded systems as reasons for the delayed deliveries. The companies also claimed that the percentage of packages that didn’t make it to their destinations in time for Christmas was small, but the Associated Press reported that it spoke with numerous customers in Alabama, California, Georgia, Kansas, Louisiana, Nevada, Ohio, Oklahoma, South Carolina, Texas, and Virginia who didn’t receive their Christmas packages on time.

On its website, UPS said, “We experienced heavy holiday volume and are making every effort to get packages to their destination as quickly as possible.” The Associated Press said Amazon will be refunding shipping charges and offering a $20 credit toward future purchases for customers who didn’t receive their packages on time.

Reuters said these issues could lead e-commerce sites like Amazon to extend the web of their shipping network and rely less heavily on the big three package delivery companies. Smaller, regionally based companies only represent about 2 percent of the market, but diversifying into those areas could help Amazon avoid issues like this during periods when the site has a heavy volume of orders.

“I do think it creates an opportunity for companies other than UPS and FedEx to make some inroads here,” Anthony Gallo, a senior air freight and logistics analyst with Wells Fargo Securities LLC, said to Reuters. “There’s no downside to the retailers at this point to have more competition on the delivery side.”

A large number of customers who waited until the last minute to order gifts online contributed to the clogged system, the Washington Post reports. The good news is that we could see a higher-than-expected figure for online sales boost the retail market, which was for the most part expected to suffer due to a shortened holiday shopping season.

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