United Parcel Service wants to forget 2013’s tough holiday season and prevent it from happening again. In fact, it’s even willing to hike prices for last-minute purchases that need delivery around Christmas.
UPS said that it may charge customers more money for last-minute delivery. “If it [a late surge] creates challenges and adds costs we would charge a premium,” said Chief Financial Officer Kurt Kuehn to Reuters.
But that’s not all. “If it puts our service at risk, we would have to deny [the business],” he added.
In 2013, for instance, a surge in online orders left an estimated two million express packages without a home on Christmas Eve. This year, the company is doing its best to avoid that delivery nightmare.
And it’s doing so on the heels of a better-than-expected third-quarter profit due to higher demand by U.S. consumers and growth in Asia. UPS reported earnings Friday $1.32 per share. That’s up 14% from $1.16 a year earlier. Analysts, meanwhile, expected $1.28 per share.
“It’s encouraging to see all three segments show positive momentum, as we head into our busiest time of year,” said Kurt Kuehn, UPS chief financial officer, in a statement.
In June, however, the company reported a 58% drop in second-quarter profit due to post-retirement obligations.
To meet the expected demand for the 2014 holiday season, UPS has been bolstering its business recently. It invested $500 million for infrastructure upgrades, including hiring 90,000 to 95,000 seasonal employees to “support the anticipated holiday surge,” according to a Sept. release. In 2013, meanwhile, the company hired just 55,000 workers.
Earlier in October, UPS told Fortuneit’s testing out a new service called UPS Access Point in Chicago and New York locations to speed delivery and lower costs. With the new feature, neighborhood convenience and grocery stores act as pick-up locations for packages when someone isn’t around to claim them. It hopes to have the service available in over 4,400 UPS stores by the end of 2015.
