FedEx yesterday predicted a 12.4% rise to a new ‘holiday season’ record of 317 million shipments worldwide between Black Friday (27 November), the day after the Thanksgiving Day holiday in the USA, and Christmas 2015.
This year’s peak season, which includes one more day than last year, is expected to be bolstered by three volume spikes. These include Cyber Monday (30 November) and the first two Mondays in December, in which the company expects to move more than double its average daily volume. No volume or capacity increase figures have been disclosed.
Last year, Monday December 15 was projected to be the busiest day in company history, with a forecasted 22.6 million shipments moving around the world. This compares to previous record daily volumes of 22 million in 2013 (December 16), 19.9 million in 2012 (December 17) and 17.2 million in 2011 (December 12).
To cope with the additional volumes, FedEx is adding more than 55,000 positions throughout its network, including package handlers, helpers, drivers and other support positions. Moreover, FedEx Ground will run seven-day sort operations during the peak season and FedEx Express will run expanded operations with additional hub sorts based on customer needs.
Outlining its operational preparations for the peak season, FedEx said it has continued its strategic investment in network growth and capacity to prepare for the seasonal surge in volumes.
In particular, the company is investing $1.6 billion in FedEx Ground this fiscal year, most of which is for capacity and automation, including more than 160 major expansion projects. FedEx Ground has invested nearly $2.5 billion for growth and network expansion in the last five years. The company claimed that FedEx Ground is nearly 27% faster than UPS Ground, with 83% of FedEx Ground shipments being delivered in three days or less.
FedEx Express has enhanced the capabilities of its global network through a fleet modernisation programme that saw 30 more reliable and efficient aircraft added over the past year (2 B777Fs, 18 B767Fs and 10 B757Fs). In addition, it added Enhanced Vision Systems to 250 aircraft, which will improve pilots’ ability to land in low visibility conditions and mitigate potential weather delays. The company said it is the only US carrier with FAA approval to use the technology as low as 100 feet on instrument approaches.
Moreover, FedEx Express is modernising its ground fleet by adding over 7,000 new, fuel-efficient vehicles in fiscal years 2015 and 2016 combined.
“FedEx expects to see a record number of shipments move through our global network between Black Friday and Christmas Eve,” Frederick W. Smith, CEO of FedEx Corp., said. “The shift in consumer shopping patterns, fueled by the rise of e-commerce, continues to drive our volume. Our strategic investments, unmatched flexible global network, and more than 325,000 dedicated team members around the world are ready to help the holidays arrive again this year.”
The National Retail Federation expects the overall retail sales in November and December to grow 3.7% to $630.5 billion. It also predicts that e-commerce sales will continue to grow at a faster rate than brick-and-mortar sales, rising between 6-8% to as much as $105 billion.
