Today is a big day for companies in the shipping business. Coming off of the last weekend before Christmas, it is not too surprising that the likes of UPS and FedEx are expecting a massive rush of packages ordered by everyone who gave up on the mall and just ordered it online. In case you couldn’t have guess that for yourself, both the New York Times (Crunch Time for FedEx and UPS as Last-Minute Holiday Shipping Ramps Up, Dec 21) and the Wall Street Journal (A Test for UPS: One Day, 34 Million Packages, Dec 21)have articles today about how shippers have planned to deal with the deluge.
For my money, the Journal article is more interesting if only because it contains nuggets like that e-commerce will soon account for half of all U.S. packages. This video summarizes some of the main points of the article.
The most interesting part of this to me is how UPS is automating to reduce the amount of skill needed to move packages through its hubs. Under the old system, a worker had to memorize 100 or so ZIP codes to sort packages. Now, he just has to read blue or silver as the system tells him how to sort the packages. The amount of training needed to be a successful sorter has consequently dropped from a few weeks to a few days. That’s huge if you are looking at bringing in nearly a hundred thousand temporary workers.
Presumably, this is going to be worth even more going forward as the volume of e-commerce shipment increases. Retail sales are always and will always be seasonal. If UPS has to live and die with the swings of retail orders, then the ability to take any warm body off the street and have them quickly be a productive team member will be even more important.