Tuesday, December 28, 2010

For UPS' peak shipping day, growth forecast is optimistic

NEW YORK — For UPS, it's beginning to look a lot like a normal Christmas.
Wednesday was forecast to be the busiest day of the year for the world's largest package delivery company. It expected to deliver a record 24 million shipments worldwide in 24 hours. That is 9 percent higher than last year and 2007 — the year before the recession took hold. It's 60 percent higher than a normal day.

The glowing forecast for holiday shipping continues a trend of higher revenue and shipping volume for UPS during the first nine months of the year. U.S daily package volume improved by almost 2 percent, while international volume rose more than 17 percent.

In the U.S., after two lackluster holiday seasons, consumers are shopping and shipping again. Much of it is online, where they're spending more than ever. As of Friday, shoppers have spent $27.46 billion online since Nov. 1, up 12 percent from last year, according to research firm comScore Inc. Online holiday sales rose just 5 percent between 2008 and 2009.

Retail experts predict holiday spending will increase by two to four percent over last year.

FedEx grew, too

UPS' smaller rival, FedEx, had its busiest day last week, when the company predicted it would pick up a record 16 million shipments on Dec. 13. That's up 13 percent from last year and double that of a normal day.

FedEx defines its busiest day in terms of shipment pick-ups, while UPS marks its busiest day by number of deliveries.

FedEx, based in Memphis, expects to deliver more than 223 million shipments worldwide this holiday season. UPS forecast double that number.

Most deliveries on UPS' busiest day will come from online retailers such as Amazon.com. The items shipped most often through UPS and FedEx this year include books, clothes and personal electronics such as iPads and smart phones.

The companies are also benefiting from rising imports of computers and other technology gadgets being ordered by businesses.

Jeff Kauffman, an analyst with research firm Sterne Agee, says that the holiday shipping predictions by UPS and FedEx suggest the economy is faring better than most believe.

Last year UPS estimated that 22 million packages were delivered on its busiest day, about the same as in 2007. UPS and FedEx did not offer holiday shipping predictions in 2008, when the recession hit.

UPS, based in Atlanta, hired about 50,000 part-time workers to help with the holiday rush. That's the same as last year.

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