Shipping

Not so fast, Amazon.com. Best Buy has raised the stakes in the online shopping wars by offering an eye-popping holiday promotion: free two-day delivery on thousands of items on its website. The deal, which went live over the weekend, is an aggressive move by the electronics retailer to win over holiday shoppers who are especially concerned about shipping speed when making online purchases in the home stretch before Christmas. Best Buy hasn't yet announced an end date for the holiday delivery offer.

In case you haven't heard — although it's likely you have — next year the major parcel freight carriers (i.e., UPS, FedEx) will be shifting from pricing based on package weight to package size. What does this mean for online retailers? The short answer: it's going to cost you more to ship your packages. Upwards of 20 percent more, according to some industry reports.

eBay won't say it outright, so I'll say it for the company: its same-day delivery experiment is pretty much dead. On yesterday's earnings call with analysts, eBay's CEO John Donahoe was asked for an update on the eBay Now service, which lets shoppers order goods from local big-box stores via an app and get the goods delivered to them that very day. "There's an enormous amount of money that's going to be spent in same-day delivery, and I don't think that's going to be … that's not essential to our core, target consumer," Donahoe said.

Consumers remember all too well the shipping fiasco that left them giftless last year during the holidays. Nearly 2 million UPS and FedEx packages in the United States arrived after Christmas Day. On Monday, UPS announced its plan to ensure history doesn't repeat itself.

Last year's debacle in which packages failed to reach their destinations in time for Christmas was a wake up call for many retailers and shipping companies. This year, all the parties involved claim to be better prepared for a season in which shipping services will be in greater demand as more consumers place online orders. But are they? According to research by Kurt Salmon, many retailers have pushed deadlines for orders closer to Christmas despite all the problems encountered last year. Twenty-six percent of those surveyed will guarantee on-time delivery for orders placed one day to three days before Christmas.

For months, contract negotiations between a powerful union and multinational shipping lines progressed amicably in public, even though roughly 20,000 West Coast dockworkers labored without a contract. Now the public harmony has been shattered, raising fears that a strike or lockout could close ports up and down the coast and cause economic pain. The Pacific Maritime Assn., which represents employers operating port terminals and shipping lines, has accused the International Longshore and Warehouse Union of deliberately slowing operations at four major West Coast ports, including Los Angeles and Long Beach — the nation's busiest complex.

The U.S. Postal Service is adding package delivery on Sundays during the holidays to meet the expected growing demand as online retailers ship more products to customers. In a press release sent out yesterday, the USPS said it would be delivering packages seven days a week in major cities and high-volume areas starting Nov. 17 through Christmas Day in response to expected double-digit package volume growth.

Still scarred from last year's shipping disasters — customers not receiving their orders (i.e., gifts) before Christmas despite being guaranteed they would at the time of purchase — online retailers are taking a more cautious approach to holiday shipments this year. Staples, Macy's, Gap, Pottery Barn, Kohl's and Nordstrom were just some of the brands that broke their Christmas delivery promises last year when carriers UPS and FedEx were overwhelmed with last-minute orders. It seems retailers have learned their lesson and are preparing to avoid a repeat of last year.

After years of ending the holiday shopping season with too much merchandise stacked in their warehouses, U.S. retailers face the opposite this year: they may not have enough. Equipment shortages, labor negotiations and rail delays are slowing shipments from the Ports of Los Angeles and Long Beach, the nation's biggest container hub, just as retailers are piling up goods for their most important period of the year. Cargo shipments through the two ports rose 3.1 percent in the third quarter, slower than the 4.3 percent gain a year earlier.

While the quest for faster shipping is an ongoing struggle for retailers and fulfillment companies, it's unlikely that drones or anticipatory shipping alone will be the key to faster deliveries. Instead, these services will be the gateway into a new shipping model — one that's customer centric, highly personalized and characterized by the following: