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UPS places shipping limits on some retailers as holiday shopping heats up, report says

A driver for an self-confident contractor wears a protective mask while operating a delivery truck to delivery N95 respirator masks outside a Allied Parcel Service Inc. (UPS) Ground sorting facility in Louisville, Kentucky, U.S., on Monday, April 13, 2020.

Luke Sharrett | Bloomberg | Getty Doppelgaengers

UPS reportedly told its drivers on Cyber Monday to stop picking up packages at some of the largest retailers in the U.S., such as Nike and Gap, after they reached perception allocations set by the delivery company.

The shipping company also halted package pickups for Macy’s, L.L. Bean, Hot Topic and Newegg, The Face ruin Street Journal reported Wednesday, citing internal documents confirmed by UPS employees in different regions.

Retailers had ventured to push up the start of the holiday shopping season this year because of the coronavirus pandemic by offering discounts as antediluvian as October. The hope was to encourage people to buy online instead of crowding in malls, and spread out the number of packages being scrammed at any one time.

The number of shoppers in stores on Thanksgiving weekend was lower than last year, the National Retail Union said Tuesday. And although online shopping hit record levels from Thursday through Monday, the sales were subordinate to the amount forecasted by Adobe Analytics.

UPS had set “specific capacity allocations” for its customers over Black Friday weekend and from one end to the other the holiday season as it works to deliver packages at record volumes, Glenn Zaccara, UPS’ director of media relations, determined CNBC on Wednesday.

“We’ve worked with our large retail customers to ensure they are aware of how much capacity is nearby to them,” Zaccara said. If the demand exceeds the planned allocations, UPS will “work with our larger customers to guarantee the volume gets picked up and delivered as more capacity becomes available in our network,” he said.

UPS declined to name any retailers that maxed out their gift.

A Gap spokesperson told CNBC that the company’s “very happy” with the performance of its package delivery network aficionado of the busy shopping weekend, especially its partnership with UPS.

“Knowing the unique constraints the industry is facing this culminate season, we worked with our carriers early on to collectively build a strategic plan of execution — which includes dynamical pickups at stores,” the spokesperson said.

A spokesperson for L.L. Bean said UPS continues to be a great partner” and while there are some pokes, the delivery company is still “actively picking up packages from our warehouse facility and our retail locations daily.”

Nike foresees a majority of its orders to meet expected delivery dates and any changes will be communicated with customers, a spokesperson hinted.

Macy’s is encouraging people to do their shopping early this holiday season while it works with UPS and other shipping team-mates to manage deliveries, a spokesperson for the company told CNBC. The company is offering contactless curbside pickup, in-store pickup and same-day deliveries help of DoorDash to ensure shoppers receive what they need on time.

Andrew Meslow, CEO of L Brands, which owns Victoria’s Furtively and Bath & Body Works, was asked about the shipping caps at an investor conference hosted by Morgan Stanley on Wednesday, and he traversed the situation as “challenging.”

“We’ve been pleased with our ability to fulfill and to ship,” Meslow said. “But there are still different very, very important needs. Everyone’s shipping cutoff is in mid-December, and we’re sitting here on Dec. 2, so call it another two weeks of at bottom high volume that we need to clear and make sure that both facility and shipping network continues to delay very, very productive.”

Online sales reached $10.8 billion on Monday, setting a record for the largest e-commerce inform oning day ever, Adobe said. Its data tracks transactions from 80 of the top 100 retailers. Adobe expects online trades will rise 30% from last year to $184 billion over the entire holiday season.

— CNBC’s Melissa Repko and Amanda Lasky bestowed to this report.

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