Blog: Crisis Management

Late deliveries meant angry customers for the two major package carries

The days surrounding Christmas see, hands down, the most package deliveries of the year, most of which are delivered by the two major carriers – FedEx and UPS. This year, both took a major battering in the reputation department when an overloaded system resulted in some packages “guaranteed” to arrive by Christmas Eve failing to make their destination in time.

Both companies issued ho-hum apologies, with UPS stating:

“We’re terribly sorry, the volume of air packages in our system exceeded the capacity of our network immediately preceding Christmas so some shipments were delayed. We know how hard it is for everyone to receive their holiday packages (Ed: shouldn’t this read “receive their holiday packages late? We don’t think anyone was hating the ones that arrived on time…), and we’re working around the clock to resolve this issue.”

FedEx’s apology was much of the same, also calling the sheer volume of packages being pushed through shipping systems an “extraordinary event.”

While UPS is offering refunds to some customers who were impacted, experts say this crisis may have been beyond their control. Forbes’ Robert Bowman interviewed former shipping industry exec Jerry Hempstead, who laid much of the blame on a severe snowstorm that left UPS’ Lousville hub deadlocked, as well as unrealistic delivery promises from online retailers like Amazon:

“When you have hubs that are affected by weather, trucks can’t get in and out, but the shippers don’t stop shipping,” said Hempstead. “They just keep loading up the network.”

UPS added 55,000 temporary employees to handle the holiday peak, while FedEx took on an additional 25,000 workers. UPS also reportedly chartered 23 more planes and acquired extra trucks to manage the surge.

Consumers blasted the carriers for failing to live up to service commitments, but both suspend their service guarantees between December 17 and 26, Hempstead said. Bad weather also cancels any guarantees that are specified in their tariffs. It was e-tailers such as Amazon.com that unconditionally promised delivery by Christmas, in some cases for orders placed as late as 11 p.m. on December 23.

In fact, that same article reports online sales in the weekend before Christmas being up nearly 40% over 2012, a number that surprised even those tracking the skyrocketing popularity of e-shopping.

What should they have done?

What crisis management steps could UPS and FedEx have taken to reduce the impact of this situation?

First off, simply letting people know what was going on ahead of time would have made a difference. We’re not talking the automated shipping status updates anyone can see when they track a package, but a blog post, YouTube video, open letter, etc. that informed stakeholders regarding the issue, showed compassion, and explained in plain terms what the companies were doing to rectify the mistakes that had been made.

Speaking of plain terms, sentences like, “the volume of air packages in our system exceeded the capacity of our network” are bound to turn people off. Avoid anything that remotely reeks of jargon, especially when it comes to an apology.

Finally, how about showing some competence? From an objective standpoint, the folks at UPS and FedEx do appear to know their business, but their crisis communications failed to show it. Letting stakeholders know that they added 25,000+ workers the moment they spotted a problem would have been smart, and likely reduced the impression of incompetence many were left with. The fact that this figure is mentioned in almost no communications or reporting regarding the story is a major crisis communications fail in and of itself.

In the end, there aren’t a whole lot of other options out there besides UPS and FedEx, meaning they have a loooong way to fall before they’re in any serious trouble. At the same time, there’s no sense in allowing mistakes to result in a paper-thin reputation “shield”, something that every organization should be careful to preserve in case of an incredibly damaging incident.

We’ve said it before, and we’ll absolutely continue to say it in 2014, make sure your crisis communications express the Three C’s – Confidence, Competence and Compassion – if you want to see success.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]