My live panda didn't show up in time for Christmas. Apparently, Amazon.com's (NASDAQ:AMZN) wave of last-minute orders overwhelmed United Parcel Service (NYSE:UPS), leading to missed delivery times and sad faces on Christmas (also the selling of a live panda is "illegal and immoral," or whatever). The companies have pledged to make it up to customers, though, with Amazon already offering affected shoppers a $20 gift card, a refund on shipping costs, and (let's imagine) a time machine to go back and give little Jimmy his red wagon on Christmas morning instead of Boxing Day.
Amazon's massive Christmas bonus
For a company that moves little boxes from one place to another so well, UPS' shortfall on Christmas was surprising. It's doubly surprising because Amazon is an important customer for the shipper. If the increase in Amazon Prime members is any indication, 2014 is going to be a very big year for Amazon and UPS. According to a press release from Amazon, the retailer "shipped enough items with Prime this holiday to deliver at least one gift to every household in America."
That huge surge is probably why my panda and your kid's sled haven't shown up. UPS wasn't ready for the rush, and the company blamed the delivery failures on the combination of volume and weather. Spanning both of those issues was a timing issue, with customers waiting longer and longer to make those late purchases.
As shipping becomes faster and cheaper, shoppers are pushing out their orders more and more. Amazon's free shipping deal for Prime members is also exacerbating the issue. This year, websites of online businesses were plastered with claims about the last days for ordering in order to receive shipments by Christmas. Those deadlines set clear expectations that UPS then failed to meet.
A representative said UPS was going to "make good on its service commitments," but it was unclear on what that response would look like for customers. Amazon's quick move to refund customers' shipping fees put the retailer in a good light, and most of the blame seems to have fallen on UPS. In a worst-case scenario, Amazon would rethink its business with UPS, but that level of fallout seems unlikely.
Instead, expect Christmas 2014 to see better planning on UPS' part. For customers still awaiting package deliveries, there's not much to do but wait. Amazon should be reaching out to affected shoppers, but no gift card can bring back a Christmas morning letdown. Now if you'll excuse me, there's an animal control car parked outside, so I need to run. Please feed my panda, if you see it while I'm gone.
Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and United Parcel Service. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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