United Parcel Service (UPS) revealed on Tuesday its plan to bring on board more than 100,000 seasonal employees to manage the anticipated surge in demand during the upcoming 2023 holiday season. This figure mirrors the number of temporary workers hired by the world’s leading package delivery company during the same period the previous year.
The fourth quarter, encompassing the festive season, accounts for the lion’s share of UPS’s annual revenue. To meet the heightened shipping demands during the holiday season, UPS and its competitor, FedEx Corp, consistently bolster their workforce with thousands of temporary personnel between October and January.
This announcement coincides with the recent ratification of a new five-year accord for approximately 340,000 workers in the U.S. represented by the Teamsters. The agreement encompasses elevated wages and enhanced benefits for employees within the company. Last month, UPS revised its projections for full-year revenue and profitability downward, attributing the adjustment to unexpectedly high labor expenses and business losses incurred during the tumultuous negotiations with the Teamsters Union.
Speculation has emerged that a significant portion of UPS’s clientele redirected an estimated one million packages per day to alternative providers. This shift resulted in an approximate loss of $200 million in sales revenue. Of this total, sources suggest that one-third gravitated towards FedEx.
Market analysts anticipate a more subdued growth in holiday sales this year, primarily due to the persistent high inflation rates. A report released by career consultancy firm Challenger, Gray & Christmas further underscores this trend, revealing that retailers plan to hire the fewest seasonal workers in 2023 since the financial crisis of 2008. This shift is attributed to subdued consumer spending and escalating labor costs.
Despite the challenges presented by the current economic landscape, UPS remains steadfast in its belief that augmenting the seasonal workforce represents the optimal strategy to navigate the demands of the crucial fourth quarter. As of this report, FedEx has yet to disclose its plans leading up to the impending holiday season.
Source: Reuters
