New FedEx, USPS Holiday Shipping Deadlines Another Sign of Weak Demand
FedEx and the U.S. Postal Service (USPS) announced their holiday shipping deadlines this week.
U.S. customers have until Dec. 22, the final Friday before Christmas, to use FedEx Express for same-day delivery, according to the Memphis, Tenn.-headquartered parcel giant.
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USPS customers have until Wednesday, Dec. 20, to use Priority Mail Express for next-day to two-day delivery by 6 p.m. and get their items delivered in time for Christmas. Last year, this deadline was Friday, Dec. 23, but USPS didn’t guarantee delivery by Christmas Day.
UPS hasn’t yet announced its 2023 holiday deadlines.
FedEx added one change that’s new this year. Shippers using Ground Economy or Freight Economy options, which are typically reserved for small businesses, will be able to ship later than last holiday season.
To ensure delivery before Dec. 24, shippers using Ground Economy must ship by Wednesday, Dec. 13, five days later than 2022, when Thurs. Dec. 8 was the deadline.
The delivery deadline for Freight Economy, which involves shipments of goods that are above 150 pounds that travel via less-than-truckload (LTL), is Tuesday, Dec. 12—four days after the prior-year cutoff.
“The more customer-friendly approach stems primarily from FedEx expecting fewer parcels this holiday season (and thus placing less of a load on their network),” said Jason Miller, interim chairperson, department of supply chain management at Michigan State University’s Eli Broad College of Business.
Miller shared U.S. Census Bureau data explaining the FedEx’s decision, pointing to two macroeconomic trends that illustrate current demand.
“This would make sense given we have seen declines in e-commerce as a percent of retail trade sales excluding motor vehicles and gas (top graph below),” Miller told Sourcing Journal. “We have seen inflation adjusted revenue for courier and messengers showing a decline over the past several quarters (bottom graph below).”
These factors likely played into why FedEx and UPS authorized lower general rate increases for 2024 than what many expected, Miller previously told Sourcing Journal of next year’s 5.9 percent rate, less than the 6.9 percent increase they applied to 2023.
USPS hasn’t announced its 2024 price increase for shipping services, but the federal agency isn’t applying surcharges for the peak season, unlike UPS and FedEx. In fact, FedEx said surcharges will apply to any season of higher demand.
Amazon, which relaunched its Amazon Shipping service to compete with the major delivery players, has not announced a holiday shipping deadline schedule.
Whether UPS decides to adhere to a more customer-friendly shipping deadline like FedEx, it comes as both companies and USPS are looking to bounce back from recent revenue declines in the previous quarter.
Stemming from the decline in package volume, FedEx saw revenues decline 7 percent to $21.7 billion in the first quarter, while revenue at UPS dipped nearly 11 percent to $22.1 billion. The USPS revenue rose about 1 percent to $18.6 billion on a net loss of $1.7 billion.
Customers using FedEx Ground or FedEx Freight Priority this holiday will need to ship by Dec. 20 if they choose two-day shipping. Customers using FedEx Home Delivery, the company’s residential delivery operation, will need to ship by Dec. 21 for the two-day deadline.
Shipments via FedEx Express for next-day delivery must ship by Dec. 21, though parcels can be shipped by Dec. 22 if Saturday delivery is requested. Packages using two-day delivery services must ship by Dec. 20.
USPS consumers using both its recently introduced Ground Advantage two- to five-day delivery service and its First-Class Mail option must ships no later than Dec. 16 to arrive by Dec. 25. Additionally, shipments via Postal Service’s Priority Mail two- to three-day delivery service must ship no later than Dec. 18.
