Why Christmas gifts in US are arriving on time this year

NEW YORK • The warnings started to stream in early this autumn: Shop early or you may not get your gifts on time.

Global supply chain woes that have led to delays in manufacturing and shipping could ripple outwards, slowing package deliveries to millions of Americans in the weeks and days before Christmas, experts warned.

Despite early fears, however, holiday shoppers have received their gifts mostly on time. Many consumers helped themselves by shopping early and in person.

Retailers ordered merchandise ahead of time and acted to head off other bottlenecks.

And delivery companies planned well, hiring enough people and building enough warehouses to avoid being crushed by a deluge of packages at the last minute, as the US Postal Service was last year.

The vast majority of packages delivered by UPS, FedEx and the Postal Service this holiday season are gifts destined for residential addresses, according to ShipMatrix, a software company that services the logistics industry.

And nearly all have arrived on time or with minimal delays - defined as a few hours late for express packages and no more than a day late for ground shipments.

UPS and the Postal Service delivered 99 per cent of their packages on time by that measure between Nov 14 and Dec 11, and FedEx was close behind at 97 per cent, according to ShipMatrix.

"The carriers have done their part. Consumers have done their part," said Mr Satish Jindel, president of ShipMatrix.

"When they work together, you get good results."

That is not to say the supply chain turmoil is over. About 100 container ships are waiting off the West Coast to unload their cargoes.

Big-ticket items, including new cars, are still hard to find because of a shortage of some critical parts such as computer chips. And prices are up for all kinds of goods.

But at least when it comes to items that are in stock, delivery companies have given consumers little to complain about. By some measures, in fact, they have done a better job this holiday season than before the pandemic.

In the two full weeks after Thanksgiving, it took four days from the moment a package was ordered online for it to be delivered by FedEx, according to data from NielsenIQ, which tracks online transactions from millions of shoppers in the United States.

That compares with 4.6 days for UPS and more than five days for the Postal Service.

For UPS and FedEx, those figures are an improvement of about 40 per cent from a similar post-Thanksgiving period in 2019, according to NielsenIQ. For the Postal Service, it was a 26 per cent improvement.

The achievement is all the more notable given that Americans are on track to spend more this holiday season than the one before - up to 11.5 per cent over last year, according to the National Retail Federation.

But this year has been different: Many people started shopping earlier, motivated by shortages, shipping delays or sales from retailers.

Many Americans also eased pressure on delivery firms by doing more shopping in stores. After consumers switched to online shopping in droves when the pandemic took hold, in-store shopping have bounced back strongly this year, said retail and logistics experts.

In September, in-store sales accounted for 64 per cent of retail revenue, up 12 points from its low point during the pandemic but still somewhat below 2019 levels, according to NPD Group.

"There is pent-up demand," said Ms Katie Thomas, a top consumer analyst at consulting firm Kearney, about the compulsion to visit stores rather than buy online.

Retailers and delivery firms also worked behind the scenes to ensure supply chain disruptions did not wreak havoc on holiday packages. Retailers worked harder to forecast sales and moved inventory to areas where UPS, FedEx and others had more capacity to pick up packages.

Companies that previously relied mostly on a single delivery service started doing business with several companies. And delivery companies have spent the past two years growing their capacity.

UPS, which in the past did not make deliveries on Saturdays in much of the country, has been expanding its weekend service. It now offers Saturday deliveries to 90 per cent of the US population.

FedEx has added nearly 15 million sq ft of sorting capacity to its network since June. And, starting in the spring, the Postal Service started leasing additional space and installing faster package-sorting machines.

NYTIMES