Initially I had decided not to weigh in on the UPS and FedEx holiday delivery mishap. But, after reading opinions on both sides of the matter, I decided to toss my opinion into the growing pile.
Did UPS and FedEx make mistakes during this holiday season? Yes. Do they deserve the blame? Yes. In both companies’ most recent earnings announcements, the shortened holiday season was noted as a challenge. Very true, the rise of online retailing and weather issues added to this challenge. However, it was a challenge that could have been overcome if better planning, collaborating and setting expectations were done beforehand. Perhaps both companies should utilize their staff of meteorologists more effectively in times of weather issues and maybe include their ecommerce teams in peak season planning.
Yes, I know that hindsight is 20/20 but these are two of the best global companies, each excelling in building well planned, researched and tested networks. Peak season has always been a period in which great care and planning has been undertaken well in advance. There are lots of questions to ask each company as to what happened and I’m sure they are asking them and more internally.
I’ve included FedEx in this mishap even though they issued a statement the day after Christmas noting “we experienced no major service disruptions in the week before Christmas despite heavy volume”. Perhaps “no major service disruptions” but from personal experience, FedEx did in fact experience goof-ups. However, it was UPS that bore the brunt of customer anger but the company admitted fault and stated that they are studying the issue.
Many comments have been made that consumers should be blamed for waiting to the last minute to shop online. Other comments suggest there should be a cut-off date or maybe even a holiday surcharge. I beg to differ on all of these suggestions.
This past year as I worked on Ti reports, the one theme that resonated with each report was change. It seems that change has picked up greatly since the global recession – technology, shopping habits, business focus and so much more. Has the logistics industry changed with it? In many ways it has but in other ways it has not. As a result, a host of new logistics start-ups have popped up to address some of these changes. Some of these new start-ups were mentioned in an article I wrote in early 2013, “Out-of-the-box logistics startups challenge traditional supply chain”.
Perhaps the 2013 holiday season was the last for “traditional supply chain” methods. Perhaps we may see an end to the duopoly in which FedEx and UPS have long enjoyed. Will Amazon step up? How about Uber? Google? Ebay or even Wal-Mart? How about the regional small parcel providers – will they finally step into the spotlight?
Creativity and thinking “outside of the box” is needed in the logistics industry. Jim Casey had that creativity in 1907 when he started delivering packages and messages on foot and bicycle. Fred Smith also had that creativity in 1971 when he started an air express business.
This “out of the box” thinking is now appearing in such companies as Google and Ebay which launched same day delivery services in 2013. Amazon expanded its Amazon Fresh grocery service into California utilizing its own delivery fleet, Shipster “connects deliveries from local and online businesses with people "going there anyway"” and Uber, which Google has made investments in, is branching out beyond its taxi app service. In fact, Uber’s CEO wants Uber to be an "instant gratification" service that gives people what the need, when they need it, whether that's a ride or some other delivery.
Lastly, don’t rule out drones. UPS and FedEx have both admitted to looking at the technology. FedEx seems to have dismissed it as a device that operates for about 8 minutes and can deliver up to 4 beers. I believe the possibilities are endless for this technology – much like the “horseless carriage”.
I imagine the 2014 holiday season will be much different for UPS and FedEx as each utilizes lessons learned from 2013. By then who knows what additional delivery options will be available. Perhaps we will no longer need delivery services, we'll just use our 3-D printers and print what we need.