This time of year, American shoppers are more likely to have pumpkin spice coffee on their minds than holiday gifts. But United Parcel Service and FedEx are already gearing up for the December rush—when their shipping volume skyrockets, and social media carols of complaints about late deliveries become as commonplace as mistletoe and menorahs.
That annual ritual shows how much FedEx and UPS have come to depend on e-commerce and home delivery, which now account for around half their operating profits. But what Amazon and Etsy and their ilk give the delivery giants with one hand, they take away with the other: Online shopping has eaten into their margins and forced them to rebuild their supply chains—while exposing them to consumer wrath.
