Getting the holidays right is crucial for UPS to convince investors it can profit from the rise of e-commerce, and the company has been stepping up investment in automated warehouses and upgraded technology in an effort to meet the challenge.
United Parcel Service’s aggressive investment in handling the online shopping boom is about to be put to the biggest test yet.
Holiday-season deliveries will rise 5 percent to a record 750 million, the courier said Thursday. That will add to the strain on an already busy global network. UPS handled a 19 percent increase in daily export-related volumes in the third quarter, the third straight period with double-digit growth.
Getting the holidays right is crucial for UPS to convince investors it can profit from the rise of e-commerce, and the company has been stepping up investment in automated warehouses and upgraded technology in an effort to meet the challenge. This year, it’s adding 95,000 seasonal workers and tacking an extra fee onto peak-season packages. It’s also putting new Boeing jumbo jets on cargo routes across the Pacific.
“I believe we’re well-positioned to have a successful peak season, both from a customer standpoint and investor standpoint,” UPS Chief Executive Officer David Abney said on a conference call with analysts Thursday.
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The Atlanta-based company stumbled in the 2013 holiday season when it didn’t predict a surge in last-minute packages and it failed to deliver millions by Christmas. The following year it spent too much money on seasonal workers and facilities, only to see them sit idle for long stretches.