Good News: E-Commerce Up, Bad News: Shipping Did Not Keep Up

By Gary Kim December 26, 2013

There’s good news and some short term bad news in the online commerce business around the important Christmas shopping season in the United States.

 On Cyber Monday at, customers ordered more than 36.8 million items worldwide, which is a record-breaking 426 items per second, with more than half of Amazon customers using a mobile device.

The e-commerce sales volume trend continues, and notably, use of mobiles for e-commerce exploded. So record sales volumes is the good news.

The temporary bad news is that UPS, which expected to ship more than 132 million packages over the holiday season, experienced demand significantly higher than that, causing delays, exacerbated by weather events.

It isn’t yet clear whether some retailers, in an effort to make up for sluggish sales, extended their shipping deadlines (“arrival before Christmas”), putting unexpected demand on the UPS delivery system. But that could not have helped.

That is probably on top of online volume growth of at least 15 percent.

The shipping delays appear not to have been caused by Amazon’s own logistics system, but rather inadequate UPS capacity. It is not clear whether Fedex, the other large carrier, was similarly affected.

Amazon says its own fulfillment centers processed customers’ orders in time for holiday delivery.

UPS, the world’s largest package-delivery company, says the volume of air packages exceeded its capacity immediately preceding Christmas, despite the normal seasonal uptick in shipping supply (trucks, planes, people).

So the good news, for Amazon and other online merchants, is that customer receptivity continues to grow. The bad news is that an unexpected demand surge caused the delivery system to fail, in many cases.

That’s likely to cause the shipping delivery firms to adjust the amount of “surge” capacity they will put into place for the next holiday season. But one might also suspect that some additional delivery mechanisms will be sought, by Amazon and others, or by UPS and Fedex, working with new partners, as a result.

As always, the issue is how to deal with surges of demand. But the bigger picture is that online commerce now is growing faster.

Edited by Cassandra Tucker

Contributing Editor

Related Articles

The World is His Oyster: Connected Solutions Enable Daniel Ward to See Food

By: Paula Bernier    3/16/2018

Fresh seafood can taste great, but if it is not handled properly, people can get sick, and that can lead to business closures and lost revenues. That'…

Read More

How to Get Ready for GDPR if You've Waited Until the Last Minute

By: Special Guest    3/14/2018

With less than two months until the General Data Protection Regulations (GDPR) deadline, many companies have already started making sure that their bu…

Read More

How Fintech is Helping Create Global Businesses

By: Special Guest    3/14/2018

The growth of Fintech probably has not escaped your attention. Whether you're a customer making contactless payments or an investor weighing up CFD tr…

Read More

Are We Prepared for Automation?

By: Special Guest    3/13/2018

We are barreling toward a future of automation. A great proportion of the six million US manufacturing jobs that have disappeared over the last few de…

Read More

The Dark Web - A Hot Bed for Cybercrime

By: Special Guest    3/12/2018

There is a corner of the internet that is cloaked from every day users. Beneath the typical search engines and web browsers, an illegal marketplace is…

Read More