The company anticipates handling a record 317 million packages from the day after Thanksgiving, known as Black Friday, through Christmas Eve. Shipment volumes are expected to touch astronomical heights on Cyber Monday (Nov 30) and the first two Mondays in December. In these three days, the company expects to move double than the average daily volume.
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This figure suggests a 12.4% increase from last year’s holiday season between Black Friday and Christmas Eve.
FedEx CEO Frederick W. Smith said, “The shift in consumer shopping patterns, fueled by the rise of ecommerce, continues to drive our volume”. The number of temporary workers that will be hired, 55,000, is about 10 percent more than the previous year, FedEx spokesman Tim Miller told Bloomberg. Last year, hoping to avoid a similar situation, FedEx and UPS beefed up their seasonal workforces and worked with retailers to get earlier and better estimates of how pressured their shipping network would be.
The delivery company said the projections for the holidays are included in its fiscal 2015 full year earnings guidance per share of $10.40 to $10.90. After being caught off-guard by a late surge in shipping in 2013, they greatly increased seasonal work forces previous year.
And FedEx’s outlook outstrips the federation’s overall prediction for expansion in USA holiday-season spending.
This year FedEx has invested $1.6 billion in capacity and automation projects at FedEx Ground to help with peak season.
Past year both companies touted investments in their networks and close collaboration with major retailers to manage package flows during the holidays.
This year’s holiday season actually comes with one day more than it did last year. With shopping going the digital way, e-commerce sales are expected to shine, with growth expected in the band of 6-8% to $105 billion.
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The extra preparations and investments are more important than ever because Amazon’s use of the U.S. Postal Service to deliver last-mile shipments on Sundays is cutting into the revenue of FedEx and UPS revenue, Wulfraat says.
