Holiday Shipping — At The Other End Of The Supply Chain

By Samantha Bomkamp, Associated Press Business Writer Analysts suggest major parcel carriers should expect the usual holiday rush this year, although revenue will be likely be muddled by the effects of a weak U.S. economy and changing consumer trends. Vito Randazzo, along with thousands of other delivery drivers across the country, will work the two Saturdays before Christmas making dreams come true.

FedEx driver Vito Randazzo works long hours this time of year, but the smile never seems to stop.
Working out of one of two FedEx Corp. warehouses in Brooklyn, this day is much like any other, but Randazzo, 48, is noticeably aware of the ramp up to the busiest day of the year.
Packages crowd the conveyor belt that snakes around the warehouse. Airplane cargo holds loom like massive steel igloos at the start of the belt, as couriers stretch and chat before the belt starts moving and streams boxes filled with everything from Christmas presents to medical supplies. The packages are scanned, sorted and directed onto separate belts according to their destination.
The drivers line up by their trucks when the packages arrive at their point on the belt. Randazzo arranges his cargo according to destination on the route he knows by heart.
FedEx expects Monday to be the busiest day of the year. Excluding a partnership with the U.S. Postal Service, it expects to haul 10.4 million packages through express and ground service on that day, the last chance to ship via FedEx Ground for Christmas delivery. The prediction represents a 6 percent increase over the 9.8 million shipped on last year's busiest day.
Analysts suggest major parcel carriers overall should expect the usual holiday rush, although revenue will be likely be muddled by the effects of a weak U.S. economy and changing consumer trends.
Jon Lagenfeld, an analyst with investment firm R.W. Baird, said the overall freight market is being dragged down by weakness in the housing and automotive markets, and lower consumer spending. Higher diesel prices are also hurting parcel carriers this holiday season, although FedEx will be affected more than UPS, he said, because express services make up more of its business.
National Retail Federation spokesman Scott Krugman acknowledged that while the economy and the rise of electronic gift card purchases will put pressure on shipping this year, these factors should be balanced by robust online sales growth.
Randazzo, along with thousands of other drivers across the country, will work the two Saturdays before Christmas to account for the increased holiday haul.
The 19-year veteran began his career with the parcel carrier after leaving the family pizza business, lured by the benefits and steady paycheck that support his wife and three children.
Despite the habitual nature of the job, and the amount of knowledge he's gained over the years, times have changed, Randazzo said.
He now drives one of 95 hybrid trucks in FedEx's fleet, and one of 48 in the New York City area. His truck no longer requires a key — a wristband with a delicate sensor opens the doors — although the exterior and inner workings still closely resemble the traditional vehicles.
With his truck loaded and organized, Randazzo starts the engine and heads off on his route. While he lives in Staten Island now, the Gravesend neighborhood in Brooklyn was his home for more than twenty years, so he doesn't need a map.
''I know these streets, these people were my neighbors,'' he said.
He leaps out of his truck and weaves from business to business, reflecting the four espressos he downed before work.
He enters a doctor's office, and is regaled with cheers as if he is a long-lost relative.
''Vitooooo.....!'' the receptionist exclaims, as she accepts the package and signs the ''Power Pad'' _ a computerized account of pickups and deliveries. He responds with a smile and some quick chitchat, but he is out the door in a flash, on to his next destination.
His route is as much of a cultural melting pot as New York City itself. He drives from small family businesses to large chains, quaint houses to affluent streets.
At one stop, he calms an apprehensive woman who opens her door no more than a crack, still seemingly concerned about the exceedingly smiling face on the other side.
He begins to speak to her in Spanish.
''Don't worry,'' he says. ''Package... from FedEx.''
A hand extends through the door, signs the keypad and collects the package.
Randazzo said learning how to communicate in other languages has been an important part of his job. He was born in Italy and came to roost in Brooklyn when he was 10. Speaking Italian to the many relatives still in the old country made it easier to learn enough Spanish to communicate, he said.
Around this time of year, people get very generous. Randazzo said that if he's offered gifts, it's usually a tip or a bottle of wine from his regular customers, who know of his penchant for making his own.
He said this year, he's delivering a lot of iPods, and other Apple gadgets. Computers and other electronics are probably the most popular deliveries this Christmas season, he said. Randazzo said he's also carting some more delicate cargo, as the number of flower arrangements he's delivering is rising as well.
FedEx said it expects slowing overall economic growth and slumping U.S. retail sales to be buoyed by surging e-commerce growth.
United Parcel Service Inc., FedEx's chief competitor, expects to ship 22 million packages on its peak day — Dec. 19. The projection represents less than one percent growth from last year's busiest day, and marks the smallest growth prediction in four years. UPS will add more than 60,000 employees to help with the seasonal rush.
DHL International GmbH expects to ship 14.5 million packages across the globe on its busiest day, Dec. 17, according to a company spokesman. The company, owned by the German-based mail and shipping company Deutsche Post AG, predicts U.S. business will account for between 2.4 million and 2.5 million of those shipments. The company declined to report 2006 figures.
The U.S. Postal Service expects nearly 1 billion pieces — including packages and those last-minute letters to Santa — to be mailed on Monday, its busiest mailing day of the year. USPS expects 275 million cards and letters to be tossed into a mailbox that day. Wednesday is expected to be the busiest delivery day for the USPS.
Randazzo's enthusiasm is a plus around the holidays, where the day can extend for 12-hour stretches and the amount of packages soars.
But he brushed off any negatives.
''I don't get tired from working,'' Randazzo said. ''It really energizes me to be here. I think I would be tired if I sat at home.''