Although the challenge happens nearly every year, it just keeps getting bigger: How can delivery services handle the massive increase in demand around the holiday shopping season? The key lies in supply chain operations, and the competitors in this industry seek improvements in some specific areas.
At FedEx, the focus is primarily on working with business customers to predict what their levels of demand will be, but also enforcing limits on how many packages they can add to its
system. However, it also is adding capacity, including dedicated distribution centers that are designed to handle larger packages and get them out the door faster.
At UPS, a new technology application seeks to shift where products get moved in the supply chain, to avoid bottlenecks. In addition, it has added or retrofitted 22 facilities to feature more automated capabilities, seeking to make the process more efficient and quicker. It thus estimates that 70 percent of all the packages in its system move through automated tools. In particular, its “super hub,” located near the company headquarters in Atlanta, offers the capacity to sort approximately 100,000 packages per hour.
Of course, UPS also is looking for ways to collaborate with shippers to predict peak purchases. Rather than limit their input, it charges shippers a surcharge for deliveries during prime windows, such as the week before Christmas.
At the U.S. Postal Service, the solution is a little more low-tech: The government agency sends delivery drivers out twice a day, instead of once, when its volume gets high enough. But even it has adopted a new sorting system to ease the strain.

Discussion Question:

1. What are UPS and FedEx doing to improve efficiency during peak shipping periods?

Source: Paul Ziobro, The Wall Street Journal, November 26, 2018