Heading into the holiday season, retail forecasts are full of cheer, with spending predicted to rise as much as 10.5%. But analysis of shipment data from Convey by project44 indicates that a rocky season may lie ahead, with on-time performance (OTP) already slipping since summer.
Average OTP for retail last-mile deliveries in October of 2021 was 78%, slipping five points from 2021’s high in mid-summer, as carriers contend with labor shortages and continuing challenges further up the supply chain. To make the most of this challenging situation, carriers have imposed capacity limits and surcharges while competing to hire tens of thousands of seasonal workers.
Convey by project44 analyzed data derived from tens of millions of packages shipped from more than 500,000 locations in North America in October 2021 to benchmark on-time performance for retail last-mile deliveries for FedEx, UPS, and USPS. The data revealed:
OTP slippage indicates a tough season ahead.
Overall parcel OTP for October 2021 improved by 2 percentage points over September, moving from 76% to 78% — but this is down from 83% in June and July. OTP is unlikely to improve going forward, since typically, higher holiday demand puts more pressure on delivery networks; last year, for example, carriers delivered more than 40 million packages during the holidays, with volume 61% higher in December than September.
Fedex OTP improves, while UPS slides.
FedEx achieved an OTP rate of 72%, up 5 percentage points from the prior month, due to operational improvements and increased accuracy in delivery time estimates. UPS’ OTP for October was 83%, down 5 percentage points from September.
So far, the USPS is the OTP leader, holding steady at 92%, but may be impacted as shippers exceeding capacity limits set by the commercial carriers shunt overflow packages into the USPS network. Last year, USPS OTP plummeted to 75% as the agency was overwhelmed by packages, with some deliveries delayed until January.
Last-mile freight OTP holds steady.
Retail last-mile or final mile freight delivery performance has leveled off at 71%, just slightly higher than the year’s low in September of 70%, as staff shortages in trucking continue to bedevil the industry.
For insights into consumer attitudes about the holiday delivery crunch, download Convey by project44’s latest research report, Supply Chain Struggles Go Mainstream. For more information about data and on-time visibility, learn more about how Convey gives top brands greater shipment data transparency.