United Parcel Service (UPS) is limiting shipping volume for big retailers like Nike and Gap as a means of keeping up with eCommerce delivery demands, according to a report in The Wall Street Journal on Wednesday (Dec. 2).
Drivers were told by UPS on Cyber Monday to bypass pickups from Gap and Nike as well as L.L. Bean, Hot Topic, Newegg and Macy’s, with “no exceptions,” according to an internal message seen by WSJ.
The worldwide COVID-19 pandemic has propelled a surge in online shopping and deliveries as foot traffic at physical stores has slowed to a trickle. Retailers are now largely dependent on online sales and home delivery. UPS and FedEx have responded to the demand with higher prices and a volume commitment from merchants.
“We are happy with the performance of our parcel delivery network following the higher cyber week demand,” a Gap spokeswoman told WSJ. “Knowing the unique constraints the industry is facing this peak season, we worked with our carriers early on to collectively build a strategic plan of execution.”
The temporary limits, which some drivers say they haven’t seen during previous holiday seasons, is a sign that UPS is metering the flow of packages into its network to preserve its performance during one of the busiest shipping weeks of the year. The National Retail Federation (NRF) estimated that online shopping jumped 44 percent over a recent five-day stretch that included Black Friday and Cyber Monday.
An L.L. Bean spokeswoman told the Journal that UPS is “actively picking up packages from our warehouse facility and our retail locations daily,” although there were some delays.
In May, UPS implemented surcharges during peak hours as a way to meet high demand as stores closed and people worked and learned from home. FedEx dealt with the demand by limiting the number of packages any single outlet could ship. Shipping companies are also dealing with a shortage of delivery and cargo vans, a problem also faced by automakers that are struggling with high demand. Compared to 2019, there were one million fewer vehicles available in the U.S. in October.