Fewer days between Thanksgiving and Christmas could snarl holiday shipments

At the same time, U.S. shoppers are expected to spend $240.8 billion online in November and December, according to Adobe Analytics. That’s 8.4% higher than last year’s holiday shopping season and the biggest increase since 2021.

FedEx has introduced higher surcharges for the peak holiday season to help it prepare for high demand during the seasonal shipping rush. “We again anticipate the surge in volume to carry over into the new year,” the company said. Rival UPS also announced higher fees, saying the amount of volume UPS anticipates it will handle during peak justifies the pricing. UPS CEO Carol Tomé said during an earnings call that it expects “the highest volume ever in our network” on Dec. 18. “We think that the prices are going to stick because of what the environment is telling us from a demand perspective,” she added. 

All told, logistics experts and delivery startups that spoke to Modern Retail for this story expect the condensed holiday calendar to have a wide-reaching impact on retailers and consumers, from earlier sales to shipping delays, to ensure packages get to customers in time for the holidays.

“Five days doesn’t sound like much, but that’s a significant portion of the time between Thanksgiving and Christmas that sort of evaporated,” said Michael Yamartino, CEO of Route, a post-purchase startup that works with more than 13,000 brands on package tracking, issue resolution and shipping insurance. “When it’s all hands on deck, and you’ve got even higher than normal demand, we do expect higher levels of shipping issues, so more packages that are delayed or lost or damaged.”

Transparency is key

In addition to the shortened calendar, a port strike on the East Coast flared anxiety about bringing in cargo before the holiday peak, said Matthew Hertz, founder and CEO of Third Person, which helps connect brands with third-party logistics providers. As such, holiday inventory started arriving earlier in the summer this year, around June. For now, the three-day strike has ended as of Oct. 3, with the existing contract for the union of U.S. dockworkers being extended through Jan. 15. Still, it will likely take a minimum of three weeks for the backlog of containers to unwind, according to Everstream Analytics.

In the meantime, retailers are focused on preserving their relationships with customers.

For brands, the key will be managing the customer experience and expectations, Yamartino said. To do that, a big focus will be leveraging technology and data to provide shoppers transparency on when their goods will arrive. Route has integrations with shipping companies FedEx and UPS to give retail clients like Tom Ford and Juicy Couture data insights to better help them make strategic holiday shipping decisions.  

“Visibility into what’s happening is really important so [brands] can make decisions,” Yamartino said. “They can choose different packaging. They can choose different carriers. They can send messages to their customers, or apps, discounts and things like that if there are challenges.”

Yamartino expects to see increased demand for Route’s package protection service — essentially insurance that promises that if a parcel is lost or damaged, the customer is off the hook. In his view, customers are more likely to turn into repeat buyers if brands are upfront and communicative, even when things go wrong, like if a package doesn’t show up for Christmas.

Jami Caruso, vice president of customer operations and home delivery at uShip, an online marketplace for shipping services, agreed that communication is more crucial than ever.

“If you expect delays, you should tell customers how long you expect those delays to be because I’ve found in this role that if you properly set expectations, even if it’s not going to be super fast, people are much more understanding,” Caruso said. Plus, proactive messaging mitigates inbound communications, which can be “extremely expensive, especially during the holidays,” she added. 

The rise of gig workers

As consumers increasingly shop online, shippers are diversifying their carrier mix, as well as exploring flexible multi-carrier strategies, Hertz said, and those companies will be better prepared to handle disruptions.

“There just is not sufficient capacity, so we need to invent and create that capacity using more creative solutions,” Hertz said. 

One of the ways brands are doing this is by increasingly relying on gig workers for last-mile delivery – that is, getting packages from, say, the post office to customers’ doorsteps. “If I had a crystal ball, I would say in the next 10 years… I suspect that the majority of e-commerce deliveries will be made by gig workers in their private four-door sedan.”

One such startup that has emerged to fulfill delivery demand is WorkWhile, which pairs gig workers with temporary shifts across multiple industries, including last-mile delivery. “There’s going to be a shorter amount of time to do all those deliveries,” Jarah Euston, CEO of WorkWhile, said. “So, there’s going to be increased demand, especially for the last-mile piece.”

Major companies are already factoring in the shorter calendar as they prep for the influx of demand that comes from the holidays. Amazon, for example, recommended that its third-party sellers place their Black Friday inventory in the company’s fulfillment centers a week earlier than the same deadline set last year. 

Shopping early

In a bright spot, consumers are increasingly shopping earlier and earlier for holiday gifts, a ripple effect from the height of the pandemic when bottlenecks in the world’s supply chain snarled deliveries. Retailers from Amazon to Walmart to Target have started using the month of October to push sales earlier. Amazon’s fall sales event, for example, is slated to run from Oct. 8 through Oct. 9.

“Retailers are smart, and they know that there’s a lot of volume that needs to push through the system,” Hertz said. “They’re trying to do whatever they can do to incentivize that purchasing behavior earlier in the cycle and, frankly, throughout the year.”

Historically, holiday shopping had largely taken place between Black Friday and Christmas Eve, but holiday “creep up” has pushed retailers to release their holiday promotions earlier in recent years, including pushing into Halloween. More than half of holiday shopping last year was completed before Thanksgiving, according to a survey from Boston Consulting Group.

Not everyone is concerned about shipping issues during the holiday season. The expected uptick in online sales, for example, reflects dollars, not package volume, according to Satish Jindel, a shipping and logistics consultant and president of ShipMatrix. Some of that uptick is inflation-driven, he said.

“Consumers should not be concerned that they won’t get packages on time,” Jindel said. But he advised shoppers to buy their gifts early to save money on shipping costs. “Shop early is an important message both from the point of view of costs you may have to pay for buying the items and to make sure the high cost of shipping won’t get built into your cost at buying it at a later date.”