United Parcel Service (UPS) is limiting shipping capacity for some large retailers as online shopping balloons in tandem with the coronavirus pandemic.
The shipping giant informed its drivers on Cyber Monday to stop picking up from six large retailers – Nike, Gap, L.L. Bean, Hot Topic, Newegg and Macy’s – as the volume of orders threatened to exceed capacity, The Wall Street Journal reported, citing an internal email sent to drivers across the U.S.
A UPS driver prepares to deliver packages. (Patrick Semansky /)
The caps will run throughout the holiday season, reported CNN.
It comes amid a 44% jump in online shopping in just one five-day span including Black Friday and Cyber Monday, The Wall Street Journal reported, citing the National Retail Federation.
Both those big shopping days saw record online spending, while customers for the most part eschewed brick-and-mortar outlets. And consumers are also stocking up with regular household goods as they prepare to hunker down for a pandemic winter without going out to the store, the Journal said.
“UPS continues to work closely with our largest customers to steer volume to capacity and ensure the UPS network is reliable for all customers,” UPS said in a statement cited by MassLive. “This collaboration includes specific capacity allocations last weekend and throughout the holiday season. We’ve worked with our large retail customers to ensure they are aware of how much capacity is available to them.”
“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 told CNN. “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.”
UPS and FedEx were already scrambling to obtain enough vans for deliveries, Bloomberg reported Monday. While it wasn’t hampering delivery times, it was driving up costs, Bloomberg said.
UPS has grown its number of facilities by 20, and obtained 14 additional aircraft during this peak season, CNN said, plus expanded weekend operations and ground delivery speed.
The restrictions are temporary and designed so that UPS can pace itself without having merchandise get backed up and clog the system, CNBC reported.
“We’ve worked with our large retail customers to ensure they are aware of how much capacity is available to them,” UPS spokesman Glenn Zaccara told CNBC on Wednesday, adding that if demand surpasses the allocations, the company will “work with our larger customers to ensure the volume gets picked up and delivered as more capacity becomes available in our network.”