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UPS Sets Shipping Limits on Nike, Macy's, Gap, Others

Consumers' crushing demand for online orders during the pandemic prompted UPS to limit deliveries for certain prominent retailers, a report says.

United Parcel Service  (UPS) - Get United Parcel Service, Inc. Class B Report, swamped by consumers' demand for online orders and delivery, imposed temporary shipping restrictions on six prominent retailers including Nike  (NKE) - Get NIKE, Inc. Class B Report, Macy's  (M) - Get Macy's Inc Report and Gap  (GPS) - Get Gap, Inc. Report, a media report says.

The Atlanta package-delivery major told its drivers to stop taking packages from L.L. Bean, Hot Topic and Newegg as well, the Wall Street Journal reported on Wednesday.

An internal message from the company read "no exceptions," TWSJ reported.

Experts in the industry told the paper that they expected such restrictions to be imposed if retailers exceeded their allowances for packages.

UPS and rival FedEx  (FDX) - Get FedEx Corporation Report have recently raised prices and promised to hold merchants to volume agreements, WSJ noted.

Shares of UPS at last check were down 0.4% to $167.35.

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A UPS spokesman told TWSJ that the company would pick up packages from customers whose demand exceeds allocated space when more capacity becomes available. 

Delivery networks like FedEx  (FDX) - Get FedEx Corporation Report and UPS have been overwhelmed because shoppers are stocking up on household essentials from online merchants at the same time the holiday shopping season kicks off.

In October, UPS posted third-quarter earnings that surpassed analysts' forecasts as consumers and businesses continued to turn to Big Brown to get their packages from point A to point B amid the coronavirus pandemic.

Revenue increased 16% to $21.2 billion, above the $18.3 billion brought in a year earlier and $1 billion above analysts' forecasts of $20.2 billion. 

TheStreet Founder Jim Cramer has been encouraging investors to buy UPS stock.

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