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It’s the day after Halloween; what are traders thinking? The holiday season of course. In fact, it has already started. Amazon delayed its extravagant annual sales this year due to the coronavirus pandemic, moving it from its typical July date to October. Amazon Prime Day kicked off what is sure to be a wild 2020 holiday season. Amazon did not disclose its total sales, but said third-party sellers on its marketplace earned more than $3.5 billion. Not to be outdone, Walmart
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One of the biggest questions is whether logistics companies will have the capacity to deliver all of these orders. According to several reports, UPS and FedEx
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As such, logistics companies and retailers are planning earlier than ever to anticipate the capacity shortage. As we’ve done in years past, let’s check out how some of the biggest logistics providers and retailers are handling the holiday logistics rush.
Amazon
Amazon announced that as it prepares for the holiday rush and to continue building capacity around growing online orders, it is hiring 100,000 workers. While he didn’t specify how many of those 100,000 would be season-specific, the overall strategy is to bring in warehouse and delivery workers to expand the logistics and fulfillment network. The minimum starting wage is $15 an hour, and in some markets the company said it offers up to $1,000 in signing bonuses. Amazon will also open 100 additional buildings across its fulfillment, sorting and delivery network. The company plans to increase its capacity by 50% by the start of the high season in order to efficiently manage the peaks in demand it expects. All of these numbers are in addition to the 175,000 workers hired by Amazon within months as the pandemic took hold, with 125,000 of those workers becoming full-time employees.
UPS
UPS is hiring more than 100,000 seasonal workers as it prepares for the holiday season. Like Amazon, UPS has already called on many workers to respond to the growing e-commerce boom. In the second quarter of 2020, UPS hired 39,000 people as package volume jumped 23% over the same period in 2019. As a unionized workforce, UPS is among the best paid in the industry; part-time package handlers earn $14.50 per hour and seasonal drivers can earn up to $21 per hour. On average, 35% of seasonal jobs turn into permanent positions. Like last year, UPS is also expanding its “Earn and Learn” program, which provides qualified students with a bonus of up to $1,300 toward college expenses. The shipping deadlines for UPS are December 15 UPS Ground, December 21 UPS 3 Day Select, December 22 UPS 2nd Day Air and December 23 UPS Next Day Air. UPS will also impose surcharges ranging from $1 to $3 per package on high-volume US residential shippers.
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FedeEx plans to hire a record 75,000 seasonal workers in 2020, a 27% increase from 2019. In addition to hiring more seasonal workers, FedEx is expanding its e-commerce capabilities. The company will expand its Sunday home delivery service to cover nearly 95% of the US population. FedEx is also increasing Ground’s network capacity and expanding FedEx Freight Direct service coverage. The shipping deadlines for FedEx are December 15 for FedEx Ground, December 22 for FedEx 2Day, December 23 for FedEx Standard Overnight and December 25 for FedEx Same Day. FedEx will also apply peak season surcharges to high-volume shippers, ranging from $1 to $5 depending on volume.
The postal service
The Postal Service is also gearing up for a busy season, as it prepares to deliver nearly 15 billion postal items and 800 million packages. The USPS will likely hire between 35,000 and 40,000 seasonal workers again this year in positions such as mail handlers, vacation clerk assistants and mail processing clerks. The agency will also push consumers to use its Click-N-Ship feature which allows users to order priority mailboxes for free, print shipping labels, purchase postage and even request the free next day package pickup. The Postal Service is asking consumers to plan accordingly as it predicts December 14 will be the busiest day online with more than 13 million consumers expected to visit usps.com for help shipping gifts from holidays. USPS shipping deadlines include December 18 for First Class Mail and Packages, December 19 for Priority Mail, and December 23 for Priority Mail Express.
walmart
Walmart has made major changes to its normal Black Friday sale event for the 2020 holiday season. Last week, the company announced it would be running “Black Friday deals for days” with markdowns specific to each category on different days, with an initial online offer followed by in-store offers. Dates include November 4/7 for toys, electronics and household products and November 11/14 for TVs, computers, tablets, movies and music. Walmart will hold a sale on Nov. 25, followed by the company’s “real” Black Friday the day after Thanksgiving. To meet growing demand, Walmart is hiring 20,000 seasonal workers at its e-commerce fulfillment centers across the country for a variety of positions, including order fillers and electrical equipment operators, which start at a departure time ranging from $15.75 to $23.75. on location, position and time. Walmart has already hired more than 500,000 workers across its stores and supply chain since the start of the COVID-19 pandemic. In an effort to promote customer safety, Walmart is offering pickup and delivery on more than 160,000 items that can be picked up or delivered the same day. Free next-day or two-day shipping on online orders over $35, depending on customer eligibility and location, will also be offered.
Target
To kick off the holiday season, Target will pay out $200 bonuses to all of its 350,000 hourly employees in stores, fulfillment centers and contact centers. Target also launched an online sales event to coincide with Amazon Prime Day as part of its effort to kick off the holiday season. The company is hiring about 130,000 seasonal workers this year, matching the number of employees hired last year. These hires will focus on everything from customer service to stocking shelves. The big push for 2020 is how it will approach its staffing when it comes to same-day services such as curbside pickup. Target doubles the number of employees dedicated to same-day pickup of online and in-store purchases from the first half of the year. Distribution centers will have more workers than last holiday season to ensure they can continue to restock stores in a timely manner. There will also be modified training in stores and distribution centers so that employees can switch between tasks as needed, such as sanitizing shopping carts and assisting with curbside pickup. during peak hours. Shipt, the same-day delivery startup owned by Target, will likely be very busy this holiday season.
Even though it’s earlier than ever, the holiday season begins. And this year’s season looks to be the biggest yet. Most estimates put holiday spending at around $1.15 trillion, which will represent a 1-1.5% increase over 2019. The main driver this year will be online sales, as more and more more people are avoiding physical stores. Amazon, UPS, FedEx, the Postal Service, Walmart and Target employ more than 465 million seasonal workers to ensure packages are delivered on time. The question remains whether the investment in people and infrastructure will be able to handle the pressure of increasing orders. And in a few weeks, we can talk about the looming reverse logistics nightmare.
The main author of this story was my colleague Chris Cunnane.
