Weak October retail sales and the uncertainty of the upcoming holiday season amid the worst financial crisis to hit the U.S. in decades has prompted shipping giant UPS Inc. to decide not to release a projection for the amount of packages it expects to deliver on its busiest day of the year.
It's the first year since the world's largest shipping carrier went public in 1999 that it won't be making a projection for its peak shipping day, spokesman Norman Black said. The company had been scheduled to discuss its peak projection on Tuesday during an online news conference, but that has been canceled, Black said.
The Atlanta-based company also will not project how many seasonal employees it will hire this year to help it through the holiday shipping season that runs from Thanksgiving until Christmas, Black said.
Last year, UPS delivered more than 22 million packages on its peak shipping day, which was Dec. 19, and it hired about 60,000 seasonal employees.
UPS has roughly 425,000 employees worldwide, 358,000 of whom are in the U.S.
"The holiday peak normally is the one time of year when consumer and business-to-consumer shipping surges," Black said. "But this year, early indicators — such as the just-reported 2.8 percent drop in October retail sales — are making any projection difficult. So while it is a bit unusual for UPS not to make peak projections, these are unusual times for the U.S. economy."
UPS, also known as United Parcel Service, reported last month that its third-quarter profit fell nearly 10 percent. It also projected its full-year earnings per share will come in toward the lower end of the $3.50 a share to $3.70 a share guidance it gave in July. It warned that fourth-quarter U.S. shipping volume would be down about 4 percent. The fourth quarter includes the holiday shipping period.
"As it embarks on its 101st holiday shipping season, UPS is well prepared behind the scenes to ensure the highest levels of customer service and we intend to provide the best service in the industry," Black said. "We're just not comfortable making public projections this year."
Separately, UPS has been hoping to complete a vendor agreement with DHL by the end of the year that would involve UPS carrying some of DHL's air packages. However, on Nov. 10., Deutsche Post AG, the German parent of DHL, said it will no longer offer U.S. domestic-only air and ground services as of Jan. 30, though international shipping to and from the U.S. will continue.
The decision could lead to higher shipping prices and greatly scale back the possible venture between UPS and DHL, the fourth-largest shipper of packages in the U.S. DHL, which has been hit by heavy losses and fierce competition, is cutting 9,500 American jobs.