UPS, FedEx Still Scrambling to Deliver Holiday Packages

For customers who thought they could order their Christmas gifts online at the last minute, they may have come up empty-handed. That's because UPS (NYSE: UPS) and FedEx (NYSE: FDX) both experienced record-breaking shipping volume this week, causing many holiday packages to not be delivered by Christmas Day.

"We're terribly sorry," UPS spokeswoman Natalie Black told CNN.

Neither UPS nor FedEx have said exactly how many customers were impacted by the holiday delays, but both companies have brought in extra people and rented extra trucks to deliver goods to angry customers. FedEx said it had delivered 99 percent of its ground shipments on time, and said that late deliveries were "isolated incidents."

On its website, UPS said the volume of last minute air packages exceeded its capacity to process them. Both UPS and FedEx noted they were handling hundreds of millions of shipments in a compressed holiday shopping time frame due to Thanksgiving being later than usual this year.

"We're sorry that there could be delays and we're contacting affected customers who have shipments available for pickup," FedEx spokesman Scott Fiedler told The Associated Press.

To make amends for the mixup, UPS will refund shipping costs to some customers who didn't get their Christmas packages on time, while FedEx has apologized for the delays, but has yet to say what its refund policy will be.

Retailers, too, have tried to appease disappointed shoppers. Walmart (NYSE: WMT), Amazon (Nasdaq:AMZN), and Kohl's (NYSE: KSS) are offering their apologies along with refunds and gift cards toward future purchases.

"We are reviewing the performance of the delivery carriers," said Amazon spokeswoman Mary Osako, who noted that Amazon refunded shipping charges for delayed packages and offered customers a $20 gift card for the inconvenience.

The last time UPS suffered massive delays causing packages to miss Christmas was in 2004, when an ice storm crippled Worldport, the UPS distribution center in Louisville, Ky. UPS employees ended up manually loading packages for days, and surprising revelers with Christmas Day deliveries. This year, UPS declined to ask employees to work on Christmas Day.

For more see:
-This CNN article
-This Bloomberg article

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