UPS Limiting Last-Minute Shipments

UPS, FedEx capping express holiday deliveries.
4:07 | 12/24/14

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Transcript for UPS Limiting Last-Minute Shipments
I'm Michelle Franzen in New York as the financial markets close early on Wall Street for this Christmas Eve holiday this is story stock. UPS the boys and brown trending today on Wall Street. Let's sex as the Wall Street Journal reports the shippers have started putting limits on express deliveries. As certain retailers have exceeded agreed upon limits for last minute holiday shipments. This coming on the heels of last year were nearly two million extracts express packages. Didn't a ride on time due to a massive spike. In holiday shipping and here to explain what's going on with UPS as Americans start opening up yes I'm joined by Scott gamma of the street hi there. I'm sorry you go that I'm doing well thank you an idea why shippers like UPS and FedEx are pulling back a little bit at this crucial time of year. Part watch you pointed out last year was a disaster for UPS and FedEx largely on the heels of bad weather which caused some two million packages. Cannot be delivered on time by Christmas that's according to ship matrix so finished simply trying to avoid what happened last year. And of course there are some more bad weather tonight which is in can I help things. But sources in the Wall Street Journal said that. Some of these shippers like UPS and FedEx are now limiting. The number of deliveries are taking on there simply overwhelmed. And they don't wanna add insult to injury by taking on more than they can handle all right ends all of this also about managing expectations for customers bride who work. Counting on those gifts. And wishing for them to get there on time. It really is I mean look UPS and FedEx have done a lot to bolster their infrastructure. On the heels of what happened last year UPS has invested 500 million dollars in capex for their. You know systems to make sure that some of these packages. The increased demand are able to handle they've also hired tens of thousands of seasonal workers but look at mean. In his only so much they can do the weather is the weather and plus you know if if you. In a waited till the last minute to buy packages and buy gifts you're likely gonna run into this problem so. If you had you know done your shopping closer to Thanksgiving and that time of year you're you're probably knocked around in a run into any issues. Our right we know that there procrastinators out there though so what does this mean for companies like Amazon and other online companies that want. To be able to get that customer what they want. Rival any online retailer is going to be affected here now Amazon said they're pretty confident. And you know how these packages will be shipped on time they've even to working with the US Postal Service. You know as to not put all their eggs in in several baskets like UPS or FedEx at a time abroad and who they use. But alternately. You know some of these shipments. Don't patent didn't make it on time last year's they're all largely trying to avoid some the issues that they ran into. Last year. All right so they've learned some lessons and they are getting a little bit of a break if not from the weather looking at shippers in general with fuel costs coming down on the economy and proving. Should investors stick a hard look at UPS and other. Delivery services. We'll UBS had a pretty good year the stock is up 7% since the beginning of 2014. Plus its revenue growth and slightly higher than the industry standard a five point 2%. And look low oil prices is gonna help any of these companies that rely so heavily on transportation for their business. The thing is we don't know how will be a long low oil prices is here to stay for right now it's at 55 dollars a barrel he never wanted to make. Any investments as decision based on one factor alone I mean no one was able to predict this slide in crude. So certainly you know in a few months from now we could be talking about much higher oil prices than they are now. All right Scott camp from the street thank you for joining us and happy holidays. Thank you used to. You've been watching story stocks stay with For your latest headlines I'm Michelle Franzen New York.

This transcript has been automatically generated and may not be 100% accurate.

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