The pain from UPS’s increased spending announcement would have been more intense with no benefits of tax reform. But that is cold comfort to investors who’d been ready to observe this morning.
UPS Warns of Temporary Delays Following Cyber Monday Overwhelms Network
United Parcel Service Inc. is anticipating minor delays in package deliveries throughout the center of this week following a surge in e-commerce sales swamped its network in the days following Thanksgiving.
Online orders Cyber Monday and the times following inundated expectations, UPS spokesman Steve Gaut said Tuesday, inducing a “bubble” to grow particular package centers. Heavy volumes forced one- or two-day delays for specific items ordered a week as the company worked over the weekend to catch up.
A lot of the backlog is already cleared, and UPS does not expect to miss Christmas deadlines for this, Gaut said. The world’s largest package-delivery company has been preparing for months to deal with the spike in shipments during the peak holiday season, executing a 27-cent surcharge for the first time on packages delivered to U.S. homes over certain weeks. UPS also expects to include 95,000 temporary workers.
UPS dropped 2.7 percent to $120.37 in the close in New York, the largest drop in four months. The stocks have climbed 5% this year, tracking the 15 percent progress of a Standard & Poor’s index of industrial stocks and FedEx Corp.’s 26 percent profit.
The purchasing surge prompted the company to notify lots of its drivers that they would be asked to work as many as 70 hours over an eight-day spell, Gaut said. Sixty hours over a seven-day interval is more common during peak period. Drivers are eligible for an elongated rest after that period.
“That is, after all, the third successive year where Cyber Monday buys have overwhelmed the corporation’s capability to provide packages for the holidays,” Teamsters General President James Hoffa wrote in a letter to UPS Chief Executive Officer David Abney on Monday.
UPS has implemented the temporary 70-hour workweek over eight days previously, though it’s using it more widely around its network this season, Gaut said. News of the waits at Atlanta-based UPS was reported before by the Wall Street Journal.