Last year, the holiday gifts I sent were almost late. Although they still arrived just in time, it took almost 10 days, while in the years before, the holiday shipping time had been considerably shorter. How come? I found out I wasn’t alone: UPS and other major delivery service providers suffered high late-delivery rates during the 2017 holiday season. Viewed from a business perspective, 2017 was a very good year: UPS estimated that they delivered about 750 million packages in the 2017 holiday season, which is about 40 million more packages compared to the year before. In Europe, additional services such as express delivery or even same day delivery also saw an upward shift, becoming more popular in 2017. These services are offered by major online retailers such as Amazon, in cooperation with various delivery partners. Delivery guaranteed before the holidays? No problem, if the item is ordered before a certain deadline. To ensure an on-time delivery or a delivery within 24 hours, the respective packages cannot be shipped with the usual shipping networks. Entirely separate networks have been established to run these express shipments, adding more complexity to the business. Also, these networks are running at full load shortly before 24th December. How many people suddenly remember, three days before the family celebration, that a certain someone needs to get a present!? After all, nearly a quarter of the supposedly well-organized Germans buy their presents just one or two weeks before the holidays. If you too are prone to this holiday rush, it would be wise to order at least two or three days before the deadline. Despite all guarantees, if only one of these two major unmanageable challenges for the aviation transport logistics emerges, the guaranteed delivery date can no longer be kept.
Weather and System Failures
The first challenge is one that can neither be planned nor controlled: the weather. Although we know that winter usually involves snow, we do not know when, where and how much will come. And then there are storms, black ice, sleet, hail, etc. In central Europe for example, December 2010 was a true horror month from the perspective of aviation. Unusually cold weather and heavy snowfall resulted in massive shipping delays. Airports were drowning in snow, aircraft could not be de-iced in such large numbers in time, also there was a shortage of grit. In the following years, such extreme weather conditions were rare, still it could happen again, right?
The second major challenge lies in the affected aviation and logistics companies themselves but is a little easier to control: IT system failures of any kind. If a larger network breaks down just for a few hours in these critical weeks, a backlog occurs which cannot even be reduced until the holidays start. In November and December, all resources and systems often run beyond their maximum technical capacity and there are simply no reserves of any kind left across all providers. This makes it even more important that all resources remain available and are used optimally. To accomplish this, many providers have internally completed all IT system changes by November, so the risk of failures and their consequences is minimized in the critical pre-holiday period.
Holiday Shipping Peak in December
The hardest time of the year starts around Black Friday when the big peak builds up. The load then increases throughout December until just before the holidays start. While for the equally busy retail trade, the major peak of the season is over in mid-December, the gift logistics run at full capacity up to the last minute. As this year’s – 2018 – Christmas Eve is on a Monday, the delivery service providers expect the strongest delivery days of the year to be on the 20th and 21st of December. After that, things calm down a little bit, but the workload is still far from normal operation – holiday business continues well into January. There are two reasons for this, originating from a new development of consumer behavior in recent years. First, gift returns are increasing, secondly more and more vouchers and gift cards are given as presents, which are subsequently redeemed right during or after the holidays. From the end customer’s perspective, this is a convenient situation, enabled by an ever-improving infrastructure and more precise preparation for the holiday shipping season.
It´s never too early to start planning for the season. For instance, even temporary staff – like loaders – needs to be found, hired and trained before they can offer proper support. To maintain employment and training standards, the respective job ads need to be placed by summer at the latest. This means that DHL, UPS, and other delivery service companies, start planning for the peak season by the end of January, evaluating the experiences of last year’s season. Was the forecast met? Which challenges occurred? What are the key takeaways? However carefully they plan their resources and capacities, delivery companies will never get a full coverage of all requirements for these four to six weeks. Businesswise, it would make no sense to orientate all of their resources to this extremely busy but relatively short period. This also applies for the aviation industry as part of the logistics network. Many resources simply cannot be scaled – just think of stands and terminals with their limited amount of parking positions.
With all these obstacles and challenges, it is obvious that holiday shipping is an art in itself. It’s constantly developing, with e-commerce being an essential catalyst. The customized shipping options have become a challenge for major e-commerce providers and their partners in the aviation industry to fulfill the customer experience, requiring early and careful IT-based planning and optimization. Then there are hundreds of thousands of loaders, deliverers, postmen and many others who do their best to get their job done and packages delivered in time. So, whoever rings at your door to hand over the last present on December 24th: give them a nice tip. It’s definitely well deserved!
When will you send your holiday gifts? Did you get yours in time last year? Tell us about your holiday shipping experiences!