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FedEx, UPS face 'shipageddon' with potential shortfall of 7 million packages a day over holiday season

“If you're shopping out there, we really encourage you to shop and ship early and really that means now,” said a FedEx executive.
Amazon Package Deliveries On Prime Day
A UPS driver sorts boxes in New York on Oct. 13, 2020.Victor J. Blue / Bloomberg via Getty Images

With the holiday season rapidly approaching, delivery services are bracing for what some are calling “shipageddon," with a potential shortfall of as many as 7 million packages a day.

UPS and FedEx have told some of their shippers that they have already reached most of their capacity, according to The Wall Street Journal.

That shortage could mean up to 7 million packages a day between Thanksgiving and Christmas could face delays, Satish Jindel, president of ShipMatrix software and consulting provider, told NBC News.

“This will be an unprecedented peak season, and there will be days within the holiday season where the entire industry is constrained,” Brie Carere, executive vice president and chief marketing and communications officer at FedEx, told NBC News’ Jo Ling Kent.

“We are working with all of our customers to really smooth their demand. We're asking retailers and merchants to pull forward their sales and I think we've already seen that in the industry.”

The company coins it “shipathon,” having experienced peak levels since March.

“Basically, we've been gearing up for the last six months for this holiday season,” Carere told NBC News.

UPS is also addressing the concern.

“We are working closely with our large and medium customers to steer volume to capacity and ensure the UPS network is reliable for all customers. We align the value we provide to our customers with our pricing and our cost to serve,” according to a UPS spokesperson.

This comes as more consumers are looking to shop online and earlier amid the pandemic.

According to consulting company Accenture, 75 percent of consumers say they’ll do at least some of their holiday shopping online this year — up 65 percent from last year — and 43 percent plan to do so exclusively.

Amazon alone saw third-party sales increase by 60 percent during its two-day Prime Day event last week, with sellers earning over $3.5 billion.

According to retail conference company CommerceNext, 49 percent of merchants worry that fulfillment centers may struggle to keep up with e-commerce levels like these and 60 percent think shippers may cap deliveries during peak demand.

Both UPS and FedEx are adjusting to new consumer trends to keep up with the big-name retailers who have already done so.

“Strategies for working with our largest customers during this time include helping shift package volume away from the heaviest demand shipping days, to fully utilizing weekend capacity, and aligning promotional strategies with capacity,” according to a UPS spokesperson.

UPS hired 39,000 new employees earlier this year and plans to make more than 100,000 seasonal hires. FedEx is adding 70,000 new employees for the holiday season and is also encouraging weekend delivery.

Carere encourages checking gifts off your list as soon as possible.

“If you're shopping out there, we really encourage you to shop and ship early and really that means now. You know as a mom, I'm going to try to get all of my shopping done by Nov. 1,” she said.