Subscribe to Breaking News emails

You have successfully subscribed to the Breaking News email.

Subscribe today to be the first to to know about breaking news and special reports.

UPS Finally Hit the Mark This Holiday, While FedEx Stumbled Late

by Reuters /  / Updated 

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

CHICAGO - After two consecutive years of problems during its holiday peak package season, UPS delivered on time at Christmas this year while its main rival FedEx had a last-minute stumble that left some gifts undelivered until after the holiday.

"It seems like the third time's a charm for UPS," said Kent Winegar, portfolio manager at Austin, Texas-based Terry McDaniel & Co., which manages assets of around $900 million and holds nearly $15 million in UPS stock. "But if e-commerce keeps growing at such a rapid rate we'll see how they do next year."

A late surge in e-commerce orders and bad weather in 2013 left an estimated 2 million packages undelivered on Christmas Eve, mostly stranded in Atlanta-based United Parcel Service Inc.'s package network. Arch rival FedEx Corp. experienced problems on a smaller scale. Last year, UPS spent $500 million, boosted seasonal hiring and worked with retailers to forecast package volumes that failed to materialize and overspending hurt fourth-quarter earnings. FedEx did not experience problems that year.

Need to Return an Ugly Sweater? Know This Before You Do

This year UPS focused on what spokesman Steve Gaut described as a "disciplined approach" to peak season, that included pulling delivery dates forward on days when it had excess capacity in its network and informing retailers of hard cutoff dates for packages to make it by Christmas using UPS' cheaper ground delivery service.

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

As a result, many retailers informed customers free shipping would end the week before Christmas - as shipping by air would be too expensive.

Noelle Sadler, chief marketing officer at online clothing retailer LuLu's, said the firm stopped free shipping over a week before the holidays because it was "hamstrung by UPS and have to follow their rules."

Inside the Holiday Madness as UPS Rushes to Deliver Holiday Gifts on Time

UPS network was snarled up for about a week after Black Friday particularly in California, Texas and the Northeast, but focused its resources to catch up, spokesman Gaut said.

In the week running up to Dec. 24, UPS had an on-time delivery rate of between 97 percent and 98 percent, he said. The company's on-time rate on a normal day, when daily package volumes are around half those during peak, is between 98 percent and 99 percent.

FedEx, on the other hand, struggled and said in a statement this was because of a "surge of last-minute e-commerce shipments."

The company said late packages were delivered Dec. 26, but did not provide any details on the number of packages that were late or in what parts of the United States.

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
MORE FROM news

Have feedback?

How likely are you to recommend nbcnews.com to a friend or colleague?

0 = Very unlikely
10 = Very likely
Please select answer

Is your feedback about:

Please select answer

Leave your email if you’d like us to respond. (Optional)

Please enter a valid email address

Thank you!

Your feedback has been sent out. Please enjoy more of our content.

We appreciate your help making nbcnews.com a better place.