Top UPS shippers temper holiday volume forecasts

A condensed peak season is expected to increase in-store shopping activity, which could blunt home delivery demand.

What happened

Major UPS shippers are forecasting softer peak season volumes than previously projected as a shortened holiday shipping period is expected to influence shoppers' behavior, executives at the parcel carrier said on a Q3 earnings call Thursday.

As the year has progressed, about 100 of UPS’ major customers — which represent 60% of its network volume and 85% of its peak season volume surge — "continue to tighten up their forecasts," CEO Carol Tomé said.

Why it matters

Still, UPS expects a strong peak season with higher Q4 revenue and volume in the U.S. compared to last year. "It'll still be a good peak, but just not as dynamic as people thought at the beginning of the year," Tomé said.

Heading into peak season, UPS' performance is on the upswing. Although Q3 per-package revenues fell 1.7% year over year in a highly competitive pricing environment, revenue and average daily volume increased during the quarter.

UPS believes the tempered expectations going into the holidays are driven in part by the tighter window to purchase gifts, according to Tomé. With only 17 shipping days between Black Friday and Christmas Eve, this year's peak season is the shortest since 2019.

This news brief is based on reporting published by Supply Chain Dive on 2024-10-24. The original report is linked below.