UPS expects to ship 750 million packages this holiday season while adding peak shipping charges

Key Points
  • Atlanta-based shipping company UPS forecasts holiday delivery of about 750 million packages.
  • UPS also expects to ship more than 30 million packages every day for 17 of the 21 shipping days before Christmas.
  • The company will impose new peak charges on some packages in late November and December.
UPS CFO Richard Perez: Saturday operations will help peak holiday season deliveries

United Parcel Service expects a handful of extra delivery days will help it smash shipping records for the 2017 holiday season.

The Atlanta-based shipping company forecasts holiday delivery of about 750 million packages, the company said in a press release Thursday. That's a 7 percent increase from its prediction last year, when the company expected to ship 700 million packages during its busiest season.

UPS also expects to ship more than 30 million packages every day for 17 of the 21 shipping days before Christmas — 510 million packages or more in less than four work weeks.

But UPS' aggressive forecasts are still overshadowed by the U.S. Postal Service's own holiday expectations.

The Postal Service on Wednesday bumped up its year-ago forecast by 10 percent for the 2017 peak season. It expects to deliver more than 15 billion pieces of mail, including 850 million packages, during the holidays this year.

To be sure, the Postal Service starts its clock on Thanksgiving and ends it on New Year's Day, whereas UPS measures its holiday season from Black Friday to New Year's Eve.

But even if UPS ships fewer packages this winter, its bottom line may still come out on top.

The company will impose new peak charges on U.S. residential packages, large packages and packages over maximum limits from Nov. 19 to Dec. 23.

"With the new peak charge, per-package costs for many shipments will only marginally increase during this very busy time of the year," said Alan Gershenhorn, UPS Chief Commercial Officer, in a press release.

The Postal Service, for its part, this year considered raising stamp prices amid hemorrhaging funds, USA Today reported.

In February, UPS launched a new Saturday ground pickup and delivery service, which will give most American customers five extra days between Thanksgiving and Christmas to ship and receive packages.

The company also plans to hire 95,000 temporary seasonal workers to drive delivery trucks and sort, load and deliver packages. Nearly 35 percent of those hired for seasonal work over the past three years are now permanent UPS employees, the company said.

The company has expanded both its workforce and the physical size of its global operation in recent years. Four new expanded facility projects have added about one million square feet of operations space in 2017, and the recently implemented Saturday ground operations alone are projected to add 6,000 jobs in total.

"We've been planning and getting ready for this," UPS CFO Richard Peretz said Thursday on CNBC's "Squawk on the Street." "With our expansion of Saturday operations earlier this year, it actually will help because we'll have 40 percent more volume that we'll be able to deliver on the Saturday operations."

UPS' third-quarter earnings and revenue numbers beat economists' estimates, and the company raised its guidance for the full year.