‘Tis the Season for Shipping: An Outlook for 2016 Holidays

Couple with credit card buying online. Christmas Shopping

Whether completing holiday shopping early or adding a last minute present under the tree, consumers shop in a frenzy during winter months. Instead of fighting to survive Black Friday crowds and chaos to fill their shopping carts, more and more consumers are filling their online carts instead, finishing their holiday shopping with internet purchases.

In a study by the Department of Transportation, online purchasing by 2040 will be a major contributor to the 29 billion tons of freight expected to travel the roads – a 45 percent increase. This upsurge in e-commerce is evident in the market today, with businesses such as Amazon and Best Buy acting as influencers in online purchasing, primarily during the holiday sale boom. According to the National Retail Federation, there’s an expected growth between 7 and 10 percent in e-commerce sales.

The transportation industry has responded to the growth in e-commerce over the years by increasing jobs, cutting delivery times, and adding new vehicles, ensuring that consumers receive their holiday gifts before Santa’s last stop. Here’s what the top shippers are up to this year:

Hiring Thousands 

Many companies are preparing for the boost in holiday shipments by hiring for the holiday season. UPS recently announced that they expect to deliver 700 million packages this year, an increase of 14 percent from the previous holiday season. With the boost in online shipping volume, UPS has arranged to hire an additional 95,000 seasonal workers for their new Atlanta hub and Florida facility.

Amazon has invited new employees as well, adding almost 40,000 positions to prepare their warehouses for the holiday rush. Responding to their own projections, FedEx has hired more than 50,000 employees company-wide for their peak season.

Expanding their Reach

In 2015, Amazon encouraged last-minute holiday shopping by promising consumers in 24 metropolitan areas—including Seattle, Chicago, and New York—that they would receive their products in two hours for free or within an hour for $8 using their Prime Now service.

Since then, Prime Now has expanded to include restaurant delivery and local stores, expanding their reach to 24 markets throughout the U.S. According to a recent study by the National Retail Federation, 10 percent of shoppers plan to use same-day delivery during the holiday season. Their study also showed 41 percent of shoppers would wait until December to complete their shopping, thereby increasing the need for quick deliveries to get everything under the tree on time.

Increasing their Air Fleets

The anticipated volume growth has also led some companies to reconsider how they transport goods this year. UPS is adding 14 new Boeing 747-8 jumbo cargo jets to its fleet – the first additions since 2013. By adding these larger jets, UPS will be able to direct smaller planes in its fleet on more efficient routes. The new jumbo jets have the capacity to hold 30,000.

In anticipation of a 10 percent growth in holiday season shipping volume due to e-commerce, FedEx Express has also added 30 new planes to their fleet.

Amazon Prime Air promises deliveries in 30 minutes or less using drones – a service they believe to be the future of delivery. Last-minute shoppers would be able to receive their purchases within the hour while retailers keep up with high demands. This would especially be useful during Cyber Monday – one of the biggest days for online retailers. Google and Wal-Mart are responding to online sales by developing drones as well.