Wal-Mart Stores Inc. reported on Wednesday that due to the surge of online purchases, its distribution network has been delayed. This shows the challenge that both retailers and delivery services face during e-commerce peak season.
“The week of Thanksgiving is an incredibly busy time for all of retail,” “With massive volume going through our system, there were some orders that took extra time, much like other major e-commerce sites,” said Wal-Mart spokesperson Danit Marquardt.
Adding, “A vast majority of orders are shipping on time now.”
The backlog shows how much the peak e-commerce volumes make Wal-Mart, United Parcel Service and other companies struggle. Despite the companies having months to prepare, and major investments to grow and upgrade distribution facilities, they all still struggle during this time of year.
“This shows they’ve got more volume and they are not hitting some delivery windows, but it is not going to affect anyone’s Christmas,” stated ShipMatrix Inc. president Satish Jindel. His company analyzes shipping data.
Wal-Mart refused to provide comment regarding the number of customers affected by the backlog.
The world’s largest retailer will be offering free two-day shipping on millions of items once the order exceeds $35. Wal-Mart stated that online sales rose 50 percent during the last quarter.
FedEx on Wal-Mart
An unnamed senior FedEx employee said that Wal-Mart’s national distribution network had been falling behind in processing around four million customer orders. He then denied giving any statement on the possible impact of the backlog on FedEx deliveries.
“The FedEx networks are performing as designed,” stated FedEx spokesperson Glen Brandow. When asked to elaborate, a Brandow declined to comment.
FedEx said that an expected amount of 380-400 million packages are to be delivered globally during this year’s peak season.
UPS also denied commenting on Wal-Mart’s backlog. Fedex’s rival revealed a number of surcharges the past recent years. This action is seen as a way to manage the higher costs that comes with e-commerce.
The world’s largest package delivery company said on Tuesday that it shifted more employees to certain markets in order to cover temporary delays caused by increased volume. UPS expected to clear the backlog this week following this recent action.
Adobe Analytics predicted that a record of $107.4 billion will be set during the holiday season for online orders. It also said on Wednesday that this was the ever to cross the $100 billion mark.
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings on the market.