UPS Will Not Forecast US Holiday Shipping Volumes

UPS Will Not Forecast US Holiday Shipping Volumes
November 16, 2008
Doug Cameron
CNNMoney.com

CHICAGO -(Dow Jones)- United Parcel Service Inc. (UPS) has dropped plans to reveal how much extra business it expects during the upcoming U.S. holiday season, highlighting a weakening economy and the continuing decline in retail- sector activity.

The largest U.S. package shipper by volume traditionally forecasts the volume it expects on the peak days before Christmas as personal and business-to- consumer traffic climaxes ahead of the holiday. In what has been a show of logistical prowess, the company has also revealed how many temporary workers it would hire for the seasonal surge.

UPS has canceled the pre-Thanksgiving release and news conference, originally slated for Tuesday, according to people familiar with the situation, who cited the uncertainty amid a softening U.S. consumer spending environment. Retail sales fell 2.8% in October, according to data published Friday, the fourth consecutive monthly decline.

The little-publicized, mid-quarter business update from UPS has traditionally been found in a consumer-focused publication that includes gift-wrapping tips and shipping information. Last year, the company forecast deliveries on its busiest day before Christmas - Dec. 19 - would jump 40% to more than 22 million. It also estimated that it would handle a peak of 5.6 million air packages on Dec. 21, nearly two-and-a-half times its normal air volume.

In 2007, UPS also said it would add 60,000 temporary staff to handle extra holiday-season business, but will shy away from a prediction this year amid what many retailers expect to be one of the weakest holiday-sales seasons for 20 years.

Manpower Inc., the temporary-employment group, had already predicted a sharp fall in seasonal hiring by U.S. retailers in its quarterly forecast published in September, warning it could be the weakest period for 30 years.

The expected weakness in retail- driven, holiday volume will add to the drop in premium business traffic at UPS and rivals FedEx Inc. (FDX) and DHL, a unit of Germany's Deutsche Post.

UPS said last month that next-day volumes fell "precipitously" in September, and forecast that fourth-quarter volume in the U.S. would be down 4% year-on- year as many business clients continued shifting from air shipping to lower-cost ground service.