On-time shipping performance improves for UPS and USPS compared with a year ago. FedEx continues to struggle with on-time delivery as it integrates last-mile delivery of economy-rate packages after discontinuing a contract with USPS earlier this year.

The already complex task of manufacturing or otherwise sourcing products and selling them to consumers got a lot harder during the pandemic. This year, merchants and researchers are optimistic about avoiding a repeat of last year’s holiday shipping catastrophe—often referred to as “shipageddon”—even as the performance of the three largest U.S. shipping carriers remains uneven.

During the seven days Nov. 26-Dec. 2, which includes Black Friday and Cyber Monday, the likelihood of on-time delivery depended a lot on which carrier, says Joe Stefani, president of Desert Cactus, an Amazon.com Inc. marketplace seller that offers licensed products emblazoned with the logos of sports teams, colleges, and other organizations.

So far this holiday season, the on-time performance of the three largest carriers—FedEx Corp., United Parcel Service Inc. (UPS) and the United States Postal Service (USPS)—have had varying levels of service, Stefani says. In terms of on-time performance, “UPS is the same as last year. USPS is much better. FedEx is much slower. The costs associated with USPS are concerning to us though,” he says.

Desert Cactus sells 90% of its merchandise via Amazon’s Fulfillment by Amazon program. The retailer ships the other 10% from its warehouse in suburban Chicago. USPS is the retailer’s primary carrier for orders not handled by Amazon’s growing delivery operation.


On-time deliveries will be more carrier-dependent in 2021, Stefani says. “For example, Amazon has built up more capacity to deliver more packages themselves in order to be less dependent on others,” Stefani says. “That will help Amazon avoid a shipageddon. The post office has also been building up package capacity, including temporary sorting facilities, which should help. If I were a company using FedEx, I’d be concerned.”

In the case of candy and food gift manufacturer Maud Borup, shipping reliability improved during the second half of 2021, a Maud Borup spokeswoman says. She says the retailer’s logistics team can now make reasonable judgments about the appropriate carrier for specific orders based on carrier capabilities, type of shipment, and destination.

“Shipping costs continue to be exponentially higher than they were pre-pandemic and as we look into our crystal ball, we don’t anticipate rates going down in the foreseeable future,” the Maud Borup spokeswoman says.

Maud Borup is a woman-owned, veteran-owned company founded by its namesake, Maud Borup, in 1907. The current owner, Christine Lantinen, acquired the company in 2005. The spokeswoman says that the manufacturer’s total annual revenue is about $40 million, and executives believe it’s on track to reach $100 million in revenue within four to five years.


USPS imposed holiday-period temporary price increases effective Oct. 3 through Dec. 26. They range from 25 cents to $5. per package, depending on weight and shipping zone.

As is customary, the other major carriers also raised prices for the holiday season:

  • FedEx imposed a $5.95 per-package surcharge for U.S. Express Package Services, U.S. Ground Services, International Ground Service started Oct. 4 and stays in place until Jan. 16, 2022. FedEx surcharges for Ground Economy Package Services were $1.50 per package Nov. 1-Nov. 28. From Nov. 29-Dec. 13, the surcharge went to $3 per package. The economy-service surcharge dropped back to $1.50 per package on Dec. 143 and will stay in place through Jan. 16, 2022.
  • In October, UPS instituted peak surcharges in the U.S. that apply to customers that shipped more than 25,000 packages during any week following February 2020. The charges apply to UPS Air Residential, UPS Ground Residential, and UPS SurePost packages range from $1.15 to $6.15 per package. At the same time, the service announced additional holiday surcharges for oversized packages, those requiring additional handling, and some international shipments.

USPS makes progress and FedEx struggles

Nov. 26-Dec. 2, USPS met its delivery promises 89% of the time, according to data from last-mile technology vendor Convey by project44. For the comparable week in 2020, USPS delivered 79% of the time on time, Convey says. For the same period, on-time performance for UPS increased to 83%, compared with 81% in 2020.

Despite the improvements at USPS and UPS, the average on-time percentage for all three parcel carriers dropped, year over year, during Nov. 26-Dec. 2 A fall-off in on-time performance for FedEx Corp., which delivered 64% of packages on time for the week, down from 75% for the same period in 2020, brought down the average. FedEx did not immediately respond to a request for comments.


The average on-time performance for all three carriers from Nov. 26 through Dec. 2 was 78% on-time percentage, down from 83% in 2020

Kassidy Bird, senior director of marketing for Convey, says operational changes at USPS might account for some of the system’s improved performance. But she says Convey attributes most of the improved performance to the behavior of the Postal Service’s competitors. At this time last year, FedEx and UPS carriers imposed strict capacity limits on customers. And, as the “carrier of last resort,” USPS accepts the packages UPS and FedEx turn away due to capacity limits.

This year, steady early shopping throughout November has helped prevent the spikes that can cause overflow shipments to flood the USPS system during the Thanksgiving weekend.

Convey compiles its shipping data based on tens of millions of packages shipped from more than 500,000 locations across the U.S., the vendor says.


Supply chain problems

In 2021, fulfillment and the challenge of having inventory available to meet consumer demand amid a global supply-chain meltdown are inextricably linked. Like many other retailers, Maud Borup has faced numerous challenges getting the ingredients it needs to keep its Minnesota production facility humming.

When the COVID-19 pandemic hit the United States in early 2020, Maud Borup started having trouble acquiring the ingredients and components needed to make products, a spokeswoman for the retailer says.

“Shipments were delayed, partially filled and sometimes damaged upon arrival. Lead times went from weeks to months to get components. Shortages of sugar, chocolate and flavorings impacted production,” she says.


During the peak of the pandemic, Maud Borup also experienced staffing problems. Workers frequently called in sick or stayed home to care for ill family members or because school closures disrupted childcare arrangements, the spokeswoman says. All of that hurt production. Outbound shipping became unreliable. Sometimes, carriers could not pick up shipments because of trucking shortages and demand. These issues persist today, she says.

“Through the pandemic and even now, it [has been] very difficult to secure shipping containers and find space on ships to transport goods to our facility,” the spokeswoman says. “If we can get our goods onto containers, we are rerouting the shipment through different ports and various states trying to avoid delays and get the container into North American. We have shipments coming into Oakland, Seattle, Tacoma, Los Angeles, Long Beach, and Vancouver, British Columbia. Container and shipping costs have more than tripled,” she added.

Maud Borup is not alone. Convey says the average “fulfillment time”—defined as the time it takes retailers to process online orders and get them picked up by carriers—has more than doubled year over year.

Convey data shows the average fulfillment time Nov. 26-Dec. 2 was 3.01 days, up from 1.31 days during the same period in 2020. Those slower fulfillment times reflect supply-chain snafus, which have made it harder for retailers to keep inventory in stock, and labor shortages, Bird says. Those fulfillment delays mean some consumers might wait longer for packages this year, she says.


No shipping disaster in 2021?

Convey forecasts that shoppers should expect typical seasonal dips in on-time performance for the entire holiday shopping season, but nothing like the “shipageddon” experienced last year. Since last year, none of the carriers have significantly altered their delivery promises in ways that would give themselves more time to get parcels to their destination, Bird says. And, in the case of FedEx, the carrier’s delivery-time promises might be unrealistically aggressive, hurting its on-time percentages, she added.

Early in 2021, FedEx ended an arrangement under which it handed off economy-rate to the USPS for last-mile delivery. As part of the transition, FedEx rebranded its low-cost service earlier this year—formerly called FedEx SmartPost—to FedEx Ground Economy. Bird says integrating last-mile delivery of economy package volume into its network has been a challenge for FedEx. In some cases. FedEx might have overestimated its ability to speed up the economy service after ending its deal with USPS, she says.

At Misfits Market, an online grocer that primarily uses FedEx, on-time delivery of its packages has improved slightly compared with last year, says Kai Selterman, chief strategy officer at Misfits, without providing specifics. Part of the reason for that, Selterman says, is that Misfits stays in close contact with FedEx and UPS, which it uses for some orders. When Misfits becomes aware of delivery problems in particular regions, it slightly delays processing orders until the retailer can be sure orders—which can include perishables—will arrive fresh and in good condition.


In addition to its on-time delivery data, Convey released results from a survey of 214 retailers fielded Nov. 24-Nov. 30. The merchants surveyed cited higher shipping costs (49%), longer shipping delays (42%) and out-of-stock items/low inventory (40%) as their top three concerns for the holiday season. In addition, nearly 40% wish they had added or changed inventory strategies to prepare for the holiday season, and 30% wish they had started holiday sales and promotions earlier.

The effect of early shopping

If shipping goes more smoothly than last year during the final days of the 2021 holiday season, it could be partly because of early shopping by U.S. consumers. Online sales data from the Cyber 5 period and before strongly suggest that consumers looked to avoid supply chain challenges and product availability at retailers.

“With early deals in October, consumers were not waiting around for discounts on big shopping days like Cyber Monday and Black Friday,” Taylor Schreiner, director, Adobe Digital Insights, told Digital Commerce 360 in late November. “This was further fueled by growing awareness of supply chain challenges and product availability. It spread out ecommerce spending across October and November, putting us on track for a season that still will break online shopping records.”

For the five days from Thanksgiving through Cyber Monday this year, U.S. online retailers sold $33.9 billion worth of goods, down 1.4% from last year, according to the Adobe Analytics unit of ecommerce and digital marketing software vendor Adobe Systems Inc. The only one of the five days that saw an increase in online shopping over last year was Thanksgiving, when sales ticked up 0.5%, Adobe says.


The decline in Cyber 5 sales, Adobe says, reflects consumers buying earlier this year, aware that many retailers were short of merchandise due to factory closures in Asia and snarled ports. For the period Nov. 1-29, online retail sales were up 11.9% year over year to $109.8 billion, with 22 days exceeding $3 billion in web sales versus nine days last year, Adobe says. Adobe had earlier reported that U.S. online retail sales increased 8% in October versus the same month last year.