Most Important Things You Need to Know About Shipping Prices and the Holiday Peak Season

Author: Jared Fisher
October 11, 2020

Holiday peak season is the time of the year when there's a large uptick in shipments for the small parcel carriers.

FedEx and UPS typically waive their service guarantee, which provides recourse if the shipments aren't delivered, because of the stress on their networks, during this time.

They hire seasonal workers to help with this issue, but unfortunately, there will still be late deliveries, which is why they waive that guarantee.

When is Holiday Peak Season?

Holiday peak season typically starts around Thanksgiving and ends by the first of the year. And again, during this period, the guarantees associated with the different services that UPS and FedEx offer don't exist.

That said, for a few weeks after Thanksgiving, they usually waive all the ground shipment guarantees but keep the air ones in place. They typically waive air shipment guarantees about a week before Christmas. All of this is an effort to account for the influx and package volume that they carry over the holidays.

COVID’s Impact on the Holiday Season

This year's holiday peak season is unique in comparison to peak seasons in years past because of the COVID pandemic.

In late March 2020, the carriers put increased restrictions on their shipping policies.

Because of that, and because there have been more natural disasters like hurricanes this year compared to years past, the carriers’ networks faced increased pressure.

Given those factors, the holiday peak season in 2020 is doubly stressed because of these other factors.

We've seen a noticeable change in shipping characteristics since March. Delivery density has changed. Prior to March, UPS and FedEx were able to pull up to a given building and deliver a hundred packages. Now, all of the recipients of those packages work from home in residences. Drivers have to make a hundred individual deliveries to get those same hundred packages delivered.

On top of that, we're seeing an increase in package volume altogether. ECommerce is a perfect example. Specific industries just exploded. All of that is in addition to the weather issues that we saw earlier this year. It’s really creating a perfect storm for a disastrous holiday peak season this year.

We expect more delays than usual, probably more than any Christmas season of years past.

What Should Shippers Expect Transit Times to Look Like for the Holidays?

Shippers should expect at least a few days added to everything they're shipping because of everything we've mentioned.

These delays will happen, and you’ll have to plan for them in advance.

Companies that want to minimize shipping costs while still meeting customer delivery expectations during this period should probably start by having an honest conversation about expectations.

It’s difficult, but you might want to tell your customers that because of 2020, there could be some delays. And you can ask your customers to put orders in early. That way they will have a few days’ advance notice to get things before they actually need them for their clients and customers.

A lot of companies will also have sales, which is a great thing to do. If you have a sale earlier than when customers will actually need the product, you can artificially spread out the demand that customers have for your products.

In short, communication and setting expectations is key. And the old adage of underpromising and overdelivering would apply here. And if shippers set an expectation with their customers that it may take longer, that gives them a little bit of breathing room to deliver more quickly and keep customers from getting upset.

How Shippers Can Be Cost-Effective During Holiday Peak Season

By planning to ship things early, shippers have more service options. There are more ways to get a package to a customer before they need it.

One thing you can look at, for example, is ground versus air. There are some circumstances in which ground packages are guaranteed to be delivered in the same amount of days that an air package would be.

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It depends on how far you're going. Let's say that you needed to ship something from Los Angeles to San Diego. In this example, it needs to get there in one day. Instinctively, you would say, I need to ship it next-day-air to get it there on time. But ground from Los Angeles to San Diego has that same delivery transit time of one day. It's so close. Why would you pay the extra money to ship something via air that we could deliver in the same amount of time for a cheaper ground service?

Paying attention to the expected delivery times for each service is of utmost importance during the holiday season.

For more information on how you can join the thousands of businesses currently using Lojistic to monitor, manage, and reduce shipping costs, please contact us now.

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