Gearing Up for Cyber Monday at FedEx

24/7 Wall St.

Package delivery service FedEx Corp. (FDX) said on Wednesday that it expects a 13% increase in global shipments during its busiest week of the year. That would be from the Sunday after Thanksgiving to the following Saturday, December 1st through 7th. The company expects to handle more than 85 million packages during the week.

Cyber Monday, December 2nd, is expected to be the busiest day in FedEx’s history as it moves 22 million shipments, up from 19.9 million last December 10th, the current record holder. FedEx attributes the increase primarily to online retail sales, which the company says is “thriving globally at three to four times the rate of traditional retail buying in brick-and-mortar stores.” We interpret that to mean that online sales are growing three to four times faster than sales in physical stores, but we also note that online sales make up less than 10% of all domestic retail sales according to research firm ShopperTrak.

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Competitor United Parcel Service Inc. (UPS) has not indicated what it expects for the holiday season, but domestic package delivery averaged about 16.2 million parcels a day in the fourth quarter of last year.

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Overall, the holiday shopping season from Black Friday to Christmas is six days shorter this year and retail sales are expected to grow at a slower pace. ShopperTrak has estimated 2.4% growth this year, while the National Retail Federation’s estimate calls for a hike of 3.9%.

Both FedEx and UPS have raised shipping rates recently and Inc. (AMZN) does not plan to eat the increase this time. The company has announced an increase from $25 to $35 to its minimum purchase amount to qualify for free shipping.

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