Tis the Season: UPS and FedEx play Santa in rush to get holiday packages under the tree

Shipping giants rush to deliver holiday packages

LOUISVILLE, Ky. — Mellany Sorrell’s face glistened with sweat as she lifted packages and seemed in constant motion during the holiday rush at the epicenter of UPS’ global air shipping network.

The 29-year-old methodically hoisted boxes and put them gingerly onto a conveyor belt — keeping them on a synchronized journey that could end under countless Christmas trees. After emptying a hulking container so big that she could step inside it, Sorrell caught her breath before starting again with another container stuffed with boxes. Each container holds up to 6 tons of cargo.

The holiday shipping rush is expected to peak for UPS on Monday, when the world’s largest shipping carrier projects it will deliver about 22 million small packages. For the entire holiday season, UPS plans to deliver roughly 400 million packages worldwide, up slightly from the 2008 holiday season.

There is no syrupy Christmas music blaring inside the massive UPS Worldport hub in Louisville, Ky., only the roar of conveyor belts. Still, workers say they get caught up in the holiday spirit.

“You’re making millions of people’s Christmases come true,” said Matthew Deeds, a supervisor.

Co-worker John Pidwell added, “We’re basically playing Santa Claus.”

UPS, based in Atlanta, hired about 50,000 seasonal workers to keep pace with the extra volume this holiday season, including about 700 extra staff at Worldport. The Louisville facility employs about 10,000 people and sorts up to 350,000 packages hourly. On average, about 1.2 million packages pass through every day. Volume reaches 2.5 million packages at the holiday peak. UPS has other domestic air hubs in Philadelphia, Dallas, Hartford, Conn., Ontario, Calif., Rockford, Ill., and Columbia, S.C., plus a network of international hubs.

Worldport was a beehive of activity during a recent overnight shift — when UPS sorts and ships most of its packages for next-day delivery. Cargo jets took off and landed, and the smell of aviation fuel wafted through the December chill. Pint-sized tractors, called tugs, hauled huge package containers from the planes and later reloaded them after the sorting was done. The company’s active fleet of 211 aircraft includes Airbus A300s, Boeing 757s, 767s, 747-400s and MD-11s.

Packages rode through a labyrinth of fast-moving conveyor belts that stretch for 150 miles during the automated sorting process. The company uses “smart labels” read by overhead cameras that scan bar codes. The codes contain information about each package’s address and whether it’s a next-day or second-day delivery — details that route each package along the conveyors.

Rival FedEx Corp., based in Memphis, Tenn., shipped 14.1 million packages on Dec. 14. That beat the company’s projection for its peak day of the year by more than a million and was the busiest day in FedEx history, topping the total of about 12 million packages shipped on its peak day last year. FedEx Corp. ships about 7.5 million packages on an average day.

FedEx’s ground unit added about 14,000 part-time and temporary workers during November and December. At FedEx Express, existing employees work overtime during the holiday season, so there were no seasonal hires there.

Peak projections from UPS and FedEx are closely watched because they tend to indicate how the broader economy is doing. Economists use FedEx and UPS volume to help track how much consumers are buying, because the companies transport so many retail goods.

The deep economic recession has taken a toll on the shipping giants.

Over the last year, FedEx laid off workers and cut wages for thousands of employees to cut costs. But the company announced this past week that it will resume merit salary increases in 2010, as well as a 50 percent resumption of the 401(k) company match for most U.S. employees.

UPS said it would reduce its 2009 capital expenditures to $1.7 billion, down $500 million from its initial budget. Its profits and sales were down in the third quarter.

FedEx recently reported lower second-quarter earnings and offered a cautious outlook for its third quarter, which ends in February. But the company thinks shipping volume could continue to pick up after that as the economy improves.

Both companies see a chance to win over new customers who only ship during the holidays.

UPS spokesman Norman Black said the holiday shopping season seems to be more compressed, in part because of the growing popularity of online shopping and bargain hunting for last-minute deals.

“The real success of the holiday season will probably be determined in those eight or nine days before Christmas,” said UPS CEO Scott Davis.

Associated Press business writers Harry Weber in Atlanta and Samantha Bomkamp in New York contributed to this report.