Ups Christmas Eve Snafu

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Case Assignment No. 1 – UPS Christmas Eve Snafu 2013 1. What occurred to prevent packages from being delivered on time? After reading the Wall Street Journal article, and doing further research online related to the UPS Christmas Eve Snafu in 2013, it is evident that UPS Air Services experienced a shortage of capacity at its main air hub in Louisville, Kentucky commonly referred to as “WorldPort” due to an unexpected spike in demand for last minute air shipments from online retailers resulting in thousands of packages not being delivered on time. UPS did not have the appropriate capacity to handle the large demand for last minute pickups from customers, delivery of packages into sorting facilities, and did not have enough aircraft available to transport the large influx of packages from their Louisville facility to their destination terminals in time to make it onto local delivery trucks. It is important to note that some delays were in part due to bad weather in certain parts of the country. An important thing to note is that the article also states that according to an IBM data report online retailers experienced a 37% spike in orders over the prior year 2012. It also states that UPS had only forecasted an 8% increase in shipping volume over the holiday period. On December 23 alone orders spiked nearly 63% over prior year forcing retailers to ship more packages via Air than expected. It is also important to note that many retailers were offering guaranteed delivery on Christmas Eve a full 24 hours later than they did previously in 2012. After the fact, UPS says there network didn’t have enough capacity to handle the unexpected increase in demand, and the holiday shipping season was already a day shorter in 2013 which just compounded this issue. According to the Wall Street Journal article, UPS has a smaller fleet of cargo planes than its rival FedEx.
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