UPS says expects holiday peak of 22 mln packages
CHICAGO (Reuters) - Package delivery company United Parcel Service Inc (UPS.N) said on Sunday it expects to handle 22 million packages on its peak day ahead of the holidays this year, an increase of less than 5 percent from its forecast of 21 million in 2006.
UPS' peak day is on December 19 this year.
Officials at the Atlanta-based company have predicted that package volume growth in this year's peak holiday season will be "less robust" than in the previous four years, reflecting slowing U.S. economic growth, the housing sector slowdown and expectations for low fourth-quarter retail sales growth.
UPS ships an average of 15 million packages a day.
Main rival Memphis-based FedEx Corp (FDX.N) has said it expects package volumes to reach 11.3 million on its peak day of December 17. Last year the company predicted a peak 9.8 million packages. A company spokesman said this year's forecast includes a low-cost service that did not figure in last year's prediction. A comparable forecast for this year would be 10.4 million, a gain of 6.1 percent.
UPS, the world's largest delivery company, does not disclose peak volumes, but officials said in early 2007 that during the 2006 peak season the company moved more than 22 million packages on three separate days.
UPS said on Sunday that it plans to add 60,000 seasonal employees to handle the extra work, and add 423 flights a week during its peak week from December 17 to Dec 21.
Retail consultant TNS Retail Forward predicted in September that overall retail sales in the crucial fourth-quarter should grow by just 3.3 percent as the credit crunch is expected to hurt consumer confidence.
However, as in recent years online sales growth is expected to outstrip store sales, and should rise 20 percent to $42 billion, TNS Retail Forward said.
UPS spokeswoman Laurie Mallis said she could not provide a breakdown of the company's forecast, but said "part of the overall modest increase we have forecast for the peak season will be from online sales."
(Reporting by Nick Carey, editing by Mohammad Zargham)
