FedEx is experiencing a holiday-like surge in demand — and to prevent its system from becoming overwhelmed, it’s placing a cap on how many packages some customers can ship from certain locations.
According to the Wall Street Journal, those customers include about two dozen retailers, such as Nordstrom, Neiman Marcus, DSW, Kohl’s and Hobby Lobby. In addition to keeping their distribution stores operational, many retailers have converted temporarily shuttered stores into warehouses to keep up with increased e-commerce orders. WSJ says the FedEx limits vary depending upon location and will remain in effect until at least Tuesday.
“FedEx Ground continues to experience significant residential volume at peaklike levels. We are proactively taking steps, similar to what we do during the peak season, to help ensure we continue providing safe and reliable service during these unprecedented times,” a FedEx spokesperson told FN. “We are continuing to collaborate with certain customers who may be tendering significantly higher-than-normal volume to implement solutions that level volume spikes where possible.”
To improve network capacity, FedEx says it is allowing some customers to bypass hubs and inject orders directly into FedEx Ground facilities. Additionally, the company is working to expand Sunday residential delivery service, with plans to provide Sunday shipment for 95% of Americans by September. FedEx is continuing to hire as it looks to keep up with this increased demand.
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But retailers are grappling with a number of issues aside from potentially overwhelmed shipping companies as they look to fulfill e-commerce orders in a timely fashion. For one, factory shutdowns in Asia disrupted the global supply chain this year, impacting access to inventory for some. Shipping product from stores, not just distribution centers, has been one way to keep up. Meanwhile, nonessential retailers have had to implement safety measures limiting the number of workers in their warehouses, slowing down the fulfillment of online orders. For these reason, some retailers, such as TJ Maxx, have placed a limit on how many web orders they will take each day.
For now, it is vital that retailers are transparent about any shipping issues, advised Jessica Ramirez, retail research analyst with Jane Hali & Associates.
“Most retailers have a disclaimer at the top of their websites right now stating that there are delays in deliveries. That’s been a precaution on the retailer’s end,” she told FN last month.
Experts say that by managing expectations clearly, companies can maintain a good relationship with customers and protect brand loyalty — which is important as the economy begins to reopen.