Donner Pass, the icy stretch of road that cuts through the Sierra Nevada mountains, is 2,000 miles away from FedEx’s world hub in Memphis.
But
as the holiday delivery season hits its peak, dispatchers here are
keeping an eagle eye on weather conditions along the pass: Any trouble
could make it impenetrable for the carrier’s trucks, closing a crucial
route out of California.
This
year, FedEx says it has strengthened its contingency planning, after
shippers were summarily slammed for delivery delays last holiday season.
Those contingency plans sprang into action this month, when heavy rains
drenched portions of California.
Acting
on updates from his 15-person meteorological team, Paul Tronsor, who
leads FedEx’s Global Operations Control, ordered 10 delivery trucks in
the area to stand down. Dispatchers instead flew two cargo planes to
Oakland to carry packages out of Northern California. That switch, Mr.
Tronsor said, minimized delays.
“It’s
like a game of chess, where the chess pieces are the airplanes and
trucks,” Mr. Tronsor said in FedEx’s control center, called the war
room, waving one hand over a digital map teeming with flashing airplane
icons and sweeping weather fronts. “The power lies in being able to
adjust, in real time, minute by minute.”
FedEx, together with its bigger rival, United Parcel Service,
is gearing up to avoid the chaos of last year, when a late surge in
shipments and bad weather overtaxed carriers and left many homes missing
timely gifts. (Some analysts have also questioned whether carriers and
big retailers underestimated consumers’ increasing use of online
shopping for last-minute presents.)
Both
carriers have hired more workers for the year’s end. UPS announced that
it was hiring up to 95,000 seasonal workers, more than twice the number
it employed last year. FedEx said it had hired 50,000 workers for the
holidays.
And
both say they have invested heavily in infrastructure. UPS said it
spent $500 million on upgrades ahead of the holiday season, including
prefabricated mobile delivery villages that expand existing shipping
centers. And FedEx said it spent almost $2 billion on newer, more
fuel-efficient planes and other upgrades to its air cargo network, in
addition to almost $2.5 billion it dedicated to ground shipping over the
last five years.
“I
think everyone’s trying to learn from the last holiday season,” said
Kevon Hills, an analyst at StellaService, a data company that tracks
online retail shipments. FedEx and UPS have both made improvements this
year, he said, “and this season they’re pretty much neck-and-neck.”
Still,
the carriers face a challenge. Thanks to surging e-commerce, they
expect to handle more parcels than ever this year: FedEx says it is
preparing to handle about 290 million shipments between Black Friday
and Christmas Eve, almost 9 percent more than last year, while UPS
expects to deliver 585 million packages in December alone, 11 percent
more than last year.
And
more retailers, eager to squeeze as much from the year-end holiday
season as possible, are pushing delivery cutoff dates later into the
season. For example, Pottery Barn has moved its cutoff date for
Christmas gift deliveries to Monday, two days later than last year. That
is despite delays with some holiday shipments last year.
Other
retailers, like Target and Walmart, are trying to relieve the pressure
on their deliveries by getting more people to order online and to pick
up their gifts in the stores. This year, Target is also offering a
“ship-from-store” service, turning back rooms at 136 locations across
the country into local distribution centers that the retailer says will
allow for faster shipping than from Target.com.
But
over all, “retailers are all trying to get the extra sales” with
last-minute deals, said Satish Jindel, president of ShipMatrix, which
tracks and analyzes retail shipments. “The problem is that some
retailers make delivery promises but fail to realize the toll that puts
on carriers.”
For
UPS, one solution has been to introduce 15 temporary aluminum-walled
“mobile delivery villages” across the country that expand sorting
centers and will let up to 90 additional trucks load and unload
packages. The company also pressed retailers early for forecasts. Its
volume forecasting for this holiday season began as soon as its handlers
got through last year’s chaos, a spokesman, Andy McGowan, said.
“It’s all about smoothing out the seasonal spike,” he said.
For
FedEx, building both extra capacity and flexibility has been critical.
The carrier, for example, now sends two empty cargo planes to fly across
wide portions of the country, ready to head to any air hub hit with an
unexpectedly large volume of shipments.
This
year, FedEx introduced a scanner that examines all six sides of a
package at once, helping its sorting centers sift through packages more
quickly and accurately. The company estimates that its systems now take
less than half a second to classify a package and send it on automated
conveyor belts toward its destination, and a package takes about two
minutes to travel through a sorting facility, from unload to reload.
FedEx’s
Express service is accepting Christmas shipments through Dec. 23. The
courier’s heavy investment has turned Memphis International Airport,
just minutes from Elvis’s Graceland estate, into the world’s busiest air
cargo hub after dark. Each night, as the final commercial passengers
stream through the airport’s terminals, FedEx jets start roaring onto
the tarmac. From about 10:30 p.m. to daybreak, about 160 planes land and
take off, shuttling 1.8 million packages in and out of the hub through
42 miles of conveyor belts.
Both
a friend and foe for UPS and FedEx is Amazon, which is progressively
upending how consumers shop during the holiday season. Amazon has been
investing heavily in its warehouses, and it plans to unveil an army of
squat robots called Kiva this summer to prepare goods for delivery.
The
online retailer, the world’s largest, is building its own sorting
centers to speed deliveries, and it also introduced a one-hour delivery
service in New York, steps that could eventually make Amazon a
competitor to FedEx and UPS. But for now, Amazon still remains a major
customer for UPS, FedEx and the United States Postal Service for its
standard deliveries. Last year, Amazon reached a deal with the Postal
Service to offer Sunday shipping throughout the holiday season.
At
the U.S.P.S., the solution is simply more work. For the first time, it
is delivering packages seven days a week in major cities from
mid-November through Christmas Day. The Postal Service is also expecting
double-digit growth this year: more than 470 million packages between
Thanksgiving and Christmas Eve, up 12 percent from last year.
And
for the first time, post offices mailed notices laying down the holiday
shipping cutoff dates to every residential address in the United
States. The cutoff, for its Priority Mail Express service, is Tuesday,
Dec. 23.
“Hurricanes,
storms, we’ll be out there trying to get your mail delivered,” said
Katina Fields, a spokeswoman for the post office. “But they just have to
be mailed by those dates. Or else your loved ones aren’t going to get
them for Christmas.”
The control room makes sure the packages make it safely through the sorting process.
After the last passenger planes are finished for the night, the control room at FedEx’s Memphis hub gets going.
The control room makes sure the packages make it safely through the sorting process.
After the last passenger planes are finished for the night, the control room at FedEx’s Memphis hub gets going.
For 1.8 million packages a night, 42 miles of conveyor belts in
Memphis lead to FedEx’s fleet of cargo jets. FedEx said it spent almost
$2 billion on newer, more fuel-efficient planes and other upgrades to
its air cargo network, in addition to almost $2.5 billion it dedicated
to ground shipping over the last five years. 
