Carriers of the cardboard

Shippers: Getting holiday packages to destinations makes this the busiest time for UPS, FedEx, DHL and the Postal Service.

December 08, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

As holiday shoppers gear up this month, so do the nation's shipping companies, adding trucks, planes and workers to handle the crush of cardboard that arrives - often at the last minute.

It's the busiest time of year for United Parcel Service, FedEx, DHL and the U.S. Postal Service. And if any of the expected 4.5 percent rise in gift-buying translates into more shipping, business will grow this year.

"It's huge," said Mark Davis, senior transportation analyst at FTN Midwest Research, about the holiday shipping business. "There's Internet traffic, orders from catalogs and other shipping of presents. Virtually everyone will mail or receive something by mail this year from an online retailer or to or from a relative."

He estimated that the shippers have grown in recent years into a $100 billion industry. And he said they should benefit from the increase in holiday spending, especially because an increasing percentage of purchases is made online. In general, shippers estimate that business is a third to 50 percent higher this time of year.

They charge more based on weight and on the swiftness of the delivery. So, Davis said, the shippers don't mind procrastinators because those packages typically have to be flown at the highest prices to their destinations.

Most packages still will travel by truck, as shippers have developed sophisticated and cheaper ground networks. The bigger companies can get a package 600 to 800 miles overnight by truck, Davis said.

The domestic air and ground networks have been in operation for years. The companies have invested heavily in technology, such as handheld computers that can track packages and global positioning systems that can help drivers.

The companies also have bought storefronts to capture more business, and in the past few years, FedEx and UPS have taken control of about 80 percent of the domestic market, largely at the expense of the Postal Service. Much of the overall growth has come from overseas shipping, including places previously not open to the companies, such as China.

Candice Adams, a member of the Coast Guard who lives in Columbia, took advantage of a nearby FedEx Kinko's Office and Print Center for the first time this year, mailing 10 gifts yesterday to family in four cities, including her hometown, Salt Lake City. Total price for packaging the items: $44.06. Total price for shipping: $33.37.

"You've got to get them here early so you don't have to wait in line, and you don't have to pay for air express. ... I think I got a good deal," she said.

As for how the packages get from place to place, "We have 245,000 workers worldwide, 649 aircraft and 71,000 vehicles, and we're adding about 7,000 workers to the FedEx ground service for the season," said Ed Coleman, a spokesman for FedEx.

A package can be dropped off in the afternoon at a downtown Baltimore Kinko's computing and printing store, now called FedEx Kinko's Office and Print Center, and get to Los Angeles by midmorning the next day via trucks, sorting hubs and a couple of flights originating from Baltimore-Washington International Airport. The area has several major sorting facilities for FedEx and others.

FedEx expects average daily package volume to increase about 30 percent during the holiday season. On its busiest day just before Christmas, it expects to handle at least 7.7 million packages, compared with its normal volume of about 5 million packages.

Prices vary, but a 3-pound box can be shipped from downtown Baltimore to Orange County, Calif., for $6.89 using FedEx's four-day ground delivery service.

The cost climbs to $28.39 for three-day service and $54.20 for next-day service, and more for early-morning delivery.

At UPS, which dominates the ground-delivery business, 357,000 people, 574 aircraft and 88,000 trucks are on the job. The company expects to add 70,000 seasonal workers during the holidays and will expand its truck and aircraft fleets by 7,000 and 24, respectively.

UPS also has storefronts, the former Mail Boxes Etc., which it bought in 2001 and renamed the UPS Store. From there, a 3-pound package can be shipped for $9.95 for four-day service, $17.76 for three-day service and $45.12 overnight.

"UPS starts planning for the next holiday season the first day back to work after Christmas," said Diana Hatcher, a spokeswoman for UPS. "It takes the entire year in planning to ensure we have confidence every package is shipped on time."

The company usually handles about 13.6 million packages a day, and UPS expects its peak day to be Dec. 21, with at least 20 million packages.

At the Postal Service, officials expect 1.2 billion pieces of mail will be delivered between Thanksgiving and Christmas, when its load increases by 50 percent. Many post offices plan to stay open late and on Sundays.

The busiest mailing day is expected on Dec. 20, when letter volume could triple to 850 million cards and letters. About 10,000 extra workers will be hired.

For a small package, post office rates range from about $21.05 for overnight delivery to $8.55 for delivery that takes up to a week.

The shippers and the post office have operations at BWI, where officials say activity has increased this season.

Cargo, about 8.8 percent higher in the first half of the year than in the corresponding period last year, has been averaging 19,000 to 20,000 metric tons a month. It also is likely to be higher this month than the approximately 23,000 tons last December, said Jonathan Dean, an airport spokesman.

"We get everything from bills [such as credit card payments] customers' mail, to flowers bought at the local supermarket to the seafood from the previous night's dinner table," he said. "It's cargo that's almost totally invisible to the everyday passenger at BWI. There's definitely more of it this time of year."

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