UPS places shipping cap on some of its largest retailers as holiday shopping booms
(KYMA, KECY/CNN) - UPS is placing shipping limits on some of its largest retailers as online shopping picks up steam during the holidays.
The restrictions will take effect this week and run throughout the holiday season, the company said. Retailers were notified of their shipping capacity in tandem with the newly enforced limits.
"UPS (UPS) continues to work closely with our largest customers to steer volume to capacity and ensure the UPS network is reliable for all customers," the company said in a statement.
UPS didn't provide names of the retailers that would be affected by the new limits.
The new limits were first reported by the The Wall Street Journal, which said the retailers included brands such as Nike and Gap.
"Knowing the unique constraints the industry is facing this peak season, we worked with our carriers early on to collectively build a strategic plan of execution," Gap said in a statement. "We have been very satisfied with the level of partnership and commitment we have received from our carrier base, and especially that of UPS, and expect that to continue through the holiday season."
A Nike spokesperson said: "We expect the majority of these orders to meet estimated delivery dates and are communicating with consumers any changes in delivery."
The shipping company is imposing the restrictions to ensure it can meet customers' needs, including small and medium-sized businesses that have been hit hard by the pandemic. The shipping limits come as the pandemic has pushed more shoppers to buy online, especially for the holidays.
Holiday sales so far this year have broken records. Thanksgiving day sales jumped to $5.1 billion, up 22% compared with last year, while Black Friday sales totaled $9 billion, also a 22% increase, according to Adobe (ADBE) Analytics.
Cyber Monday sales also saw an upswing, bringing in $10.8 billion in sales, a 15% bump from the previous year. That made Cyber Monday the largest online shopping day in history, per Adobe Analytics.
UPS says it has agreed on strategies with some if its retail customers which include "shifting package volume away from the heaviest demand shipping days, fully utilizing weekend capacity, and aligning promotional strategies with capacity."
Many parcel delivery services have struggled with the surge in demand for shipments and have began imposing measures to deal with the influx. Other shipping services such as FedEx (FDX) and USPS have increased their pricing premiums for the holidays and hired thousands of temporary workers to handle shipments.
UPS says it added 20 new facilities and 14 additional aircraft for the peak season. It also expanded its weekend operations and the speed of its ground delivery.
Meanwhile, Amazon (AMZN), one of the country's largest retailers, has skated ahead without much shipping troubles thanks to relying on its own delivery service and drivers to accommodate its slew of shipments. This past weekend, Amazon reported bringing in nearly $5 billion between Black Friday and Cyber Monday, a 60% increase from last year.
