FedEx Forecasts Jump in Holiday Deliveries

Online shoppers are going to be even busier this year as they take to the web to buy holiday gifts, FedEx Corp. predicted Wednesday.

And that means more packages to deliver. The company expects another record holiday season, with a nearly 9% increase to 290 million packages shipped between Black Friday and Christmas Eve. FedEx said it has invested billions of dollars to expand over the past few years to meet the demand.

The company's busiest day will be Dec. 15, when the company expects to ship 22.6 million packages. That is more than double an average day for the company of more than 10 million packages.

Last year, delivery companies faced a tough winter, combined with an unexpected last-minute surge in online orders.

An estimated 2 million express packages failed to make it on time last Christmas Eve, according to data from Shipmatrix Inc. About 630,000 of those were shipped by FedEx, the shipping tracking software developer estimates.

"There were some late surges based on retailer and e-tailer promotions that caused some surges beyond what we expected going in," says Patrick Fitzgerald, senior vice president of marketing and communications for FedEx. Even with the weather problems, "We were largely able to meet that demand."

The company also turned away some package volume that exceeded projections from retailers last year, something that helped it avoid the worst of the shipping delays. It could do so again this year, the company has said.

But FedEx is confident it has invested enough in its network for a smooth holiday season and to meet its customers' demands. Over the past five years, FedEx Ground has invested about $2.5 billion in expanding capacity through about 250 major projects. FedEx Ground is investing 90% of its $1.2 billion in total capital spending this year to expand capacity. FedEx is hiring 50,000 seasonal workers, an increase of 25%. The company already runs seven-day operations during peak times, including on Black Friday.

It has also spent on technology, including a new reporting system for FedEx Express dubbed Radar, which allows the company to have more visibility into shipments that are coming in.

Each Monday during this year's holiday period will surpass 20 million packages--the same as last year, when the company saw a record of more than 22 million packages shipped Dec. 16. Last year FedEx predicted Cyber Monday would be its busiest day, but changing shipping patterns moved it later in the holiday season, Mr. Fitzgerald said.

Holiday shipping trends are evolving, he said. "But the overall expectation and the increases that we see .. we're very confident of what's coming," he adds.

Rival United Parcel Service Inc. hasn't yet reported how many packages it expects to ship over the holiday season, but the delivery giant has said it is spending about $500 million to prepare for the holiday season and hiring about 90,000 seasonal workers.

Write to Laura Stevens at [e-mail]

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