Who needs Santa Claus? Investigating the 2012 Christmas peak

Christmas 2012 was another record-breaking year for parcel carriers, with many reporting volumes that made 2011’s peak seem a simple task. With year-on-year volumes rising every Christmas and the online retail boom not showing any signs of slowing down, how are carriers ensuring they are well prepared for 2013’s peak?

Retailers again reported record-breaking internet sales over the festive period. Web sales were up 44% for City Link customer John Lewis, and 11% for Hermes customer Next. Debenhams also saw a 39% increase in sales for the 18 weeks to 5 January. Although carriers can breathe a sigh of relief after successfully delivering millions of retail parcels during the festive season, there is no time for rest.

Counting down already

Like many carriers, US parcel giant UPS has already begun setting out its plans for December 2013. A spokeswoman said: “Planning starts the day after Christmas, with preparations for Christmas 2013 already underway to ensure all is set to meet the demands of each UPS customer.”

Yodel chairman Dick Stead is also confident that the Hatfield-based carrier will be prepared for the next peak. After being on the blunt end of negative publicity in 2011 when some customers complained to national media about the time their goods were arriving, the carrier took steps to ensure this festive season was successful.

Spending much of last year setting out its strategy, including capping peak-week volumes and investing in temporary staff and depots, Yodel processed over 14 million parcels, leaving only those it was unable to get a signature for undelivered.

Stead said: “Our detailed planning, of which capping our volumes was just one part, paid off; and we saw a number of retailers transfer deliveries to Yodel when their other suppliers struggled.”

Planning also paid off for DPD, which handled 20% more parcels than Christmas 2011. Through-

out the year, it had been increasing its capacity in anticipation for “significantly increased volumes”, recruiting 900 temporary staff to tackle the peak.

Geopost UK chief executive Dwain McDonald said of its B2C carrier DPD: “Planning for Christmas 2013 has started – we had our first team project meeting on 10 January. Our aim is to deliver the best service in the industry 52 weeks of the year, not just 48.”

DPD is looking to add 10 depots to its network in 2013, with upgrades to sites in Sheffied and Thetford, Norfolk, and build a £100m sorting hub in the East Midlands (see below).

Meanwhile retail volumes doubled in comparison to Christmas 2011 for same-day courier CitySprint, which made more than 250,000 deliveries in December. Chief executive Patrick Gallagher revealed it had been a “stand-out Christmas”, with its Olympics operation in the summer preparing the firm well for the festive demands.

Work has also already begun for CitySprint’s 2013 peak operation and Gallagher believes it will have to invest further in temporary staff, on top of the 300 additional couriers it recruited in 2012. “If this Christmas is anything to go by, we’ll need to recruit twice as many temporary couriers next year,” Gallagher said.

Planning process

Good communication with clients was one of the key preparatory measures  many carriers cited to ensure retailers were aware of the capacity they have.

Gallagher said: “As part of our planning process for Christmas, we discuss volume profiles with our client. The key is to never over-promise or under-deliver.”

Yodel chairman Dick Stead echoed this and said that working closely with clients allowed the firm to keep its delivery window as close to Christmas as possible, as it was prepared for the volumes agreed with retailers.

DPD prioritised its existing customers’ volumes to ensure it would be able to keep its promise to them. McDonald said: “We managed the introduction of new business ahead of the peak period, which is a reasonable thing to do when existing customers want to plan their peak deliveries.”

Record-breaking volumes were not just limited to the UK market, as Nightline and FedEx confirmed. Irish firm Nightline, which moves parcels in Ireland for many UK retailers, saw a 40% year-on-year increase in e-commerce parcels.

Chief executive John Tuohy said: “We saw the work that we do with one major store in particular rise by 144% in December 2012 compared to the year before.”

Parcels giant FedEx also saw an increase in EMEA regional volumes. A spokeswoman revealed that it processed a total of 70 million parcels in the region in its busiest week, 9-15 December, a 10% increase on the same period in 2011, and 19.8 million parcels on its busiest day.

Busiest nights

The major carriers reported that they saw peak volumes on different days, all falling within the seven days before Christmas Eve.

Courier CitySprint’s busiest night fell on Thursday 18 December, while FedEx, DPD and Nightline experienced the most intensive delivery period on Monday 17 December. Peak volumes were seen later for UPS, which delivered the most parcels on Thursday 20 December.