FedEx, UPS Turn Record Holiday Surge Into Someone Else’s Problem


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FedEx, UPS Turn Record Holiday Surge Into Someone Else’s Problem - MSN

Richard Metzler ordered automation equipment as part of a plan to double the volume his small parcel delivery company could handle this holiday season. There’s just one snag: The machinery is stuck on a ship offshore amid a global supply-chain crunch.

“The timing just couldn’t be worse,” said Metzler, chief executive officer of regional courier Lone Star Overnight, who is racing to meet demand from clients such as Best Buy Co. and Nordstrom Inc. in the seven states where LSO delivers. “We’re just having to throw more bodies at it.”

Retailers have increasingly turned to regional couriers like LSO to help shuffle packages that delivery titans United Parcel Service Inc., FedEx Corp. can’t -- or won’t. This holiday season is going to depend more than ever on operators taking on business the two dominant couriers are shunning in a rapidly growing delivery market. It’s unclear if the smaller players are ready as they grapple with everything from transportation logjams to worker shortages.

UPS and FedEx have opted to raise prices aggressively and turn away lower-yielding business rather than rush to build capacity. That has been a shock to shippers that rely on those two companies which, along with the U.S. Postal Service, control about 95% of last-mile deliveries of third-party parcels.