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FedEx, UPS confront the busiest holiday season on record

SAN JOSE, Calif. – The next week will be a 24/7, backbreaking, sleep-deprived haul for couriers such as FedEx, the United Parcel Service and the U.S. Postal Service, the last connections to deliver many much-anticipated Christmas gifts. And there is no room for mistakes.

Last year’s fiasco – when retailers overpromised on deliveries and bad weather snarled courier services, causing millions of gifts to arrive long after Santa’s visit – is still a painful memory, and everyone is working hard to avoid repeating the same mistakes.

“I think everybody is kind of on edge in making sure this holiday runs smoothly,” said Michael Mashintchian, director of logistics for ShopRunner, a San Mateo, Calif., company that offers online shoppers expedited shipping for more than 100 retailers.

With e-commerce sales up 8 to 11 percent this holiday season, delivery services face record-high volumes of packages that must get from warehouses to beneath Christmas trees before next Thursday. And with more retailers promising Christmas delivery to last-minute shoppers – and some ill-prepared to make good on those promises – holiday shipping has become a massive and challenging undertaking. For everything to go smoothly, analysts say, retailers must accurately forecast how much inventory they will sell and when, and courier services must run their planes and trucks like clockwork.

For the final seven-day sprint up to Christmas, FedEx Express couriers at the hub in San Francisco are fueled by Diet Coke, strong cups of coffee and the knocking verses of rap tunes. FedEx Express picks up most of the last-minute orders, closing out a record season of an estimated 290 million packages between Black Friday and Christmas Eve.

“From here on out, it’s going to be our ballgame,” said Rafael Campos, a 34-year courier. “My ritual is just to get here earlier, get situated, and drink a Diet Coke. For us, we really don’t feel the Christmas spirit, because we are too busy trying to make everyone else’s Christmas perfect.”

In this carefully stacked house of cards, one strong gust could send the entire thing toppling.

And yet, lots of promises have been made. Walmart said recently it would guarantee Christmas Eve delivery for packages sent by standard shipping and ordered by Dec. 19. Toys ‘R’ Us and Neiman Marcus have both said that shoppers who order by Dec. 23 can get gifts delivered by the following day, for a fee. Target announced its last day to order is Dec. 20, and is also offering free shipping, which has prompted a surge of orders, a spokesman said.

For behemoth retailers with warehouses across the country, a last-minute shipping deadline is more feasible. But analysts say too many small, ill-equipped retailers also are offering late deadlines, trying to scrape in every last dollar from their most important season.

“Retailers are pushing it a little tighter this year than last, and what is driving that is less about their confidence in delivering and more about what their competitor might be doing,” said Steve Osburn, an analyst with Kurt Salmon.

And with the growth of same-day delivery services such as Google Shopping Express and Amazon’s Prime service, customers have come to expect fast delivery from every retailer.

“Consumers want Amazon-style shipping no matter what size the retailer is,” said Jarrett Streebin, founder and CEO of EasyPost, a software company that connects businesses to shipping carriers.

But with high expectations, some customers are bound to be disappointed. Already, there are glimmers of problems with UPS. Shopper Nelson Estupin said an item he ordered from Nordstrom that was supposed to arrive last Wednesday was held at a UPS station for days.

“Lo and behold, it was finally delivered, five days late,” he said.