(Reuters) - United Parcel Service Inc (UPS.N) expects shipments during the upcoming holiday season to hit record levels this year, up 10 percent from last year, and plans to hire 55,000 seasonal workers to handle the added volume.
UPS added the same amount of workers in 2011 to keep pace with a similar increase in holiday shipments.
The world’s largest package delivery company, and rival FedEx Corp (FDX.N), are closely watched for indications of consumer demand, the health of retailers and the state of the economy.
The company estimates it will deliver 527 million packages between Thanksgiving and Christmas, which would top last year’s record of 480 million, driven by e-commerce.
As shoppers buy more of their holiday gifts over the Internet, this means more shipping volume for FedEx and UPS, which each have delivery contracts with most of the biggest e-tailers.
Large chain stores including Toys R Us <TOY.UL}, Kohl’s Corp (KSS.N), Wal-Mart Stores Inc (WMT.N) and Macy’s Inc (M.N) plan on adding more holiday workers than last year, based on the view that consumers will spend modestly more this year as the economy mends gradually.
Improved technology and productivity will help UPS handle the increased shipping volume with the same amount of seasonal hires as last year, said spokesman Susan Rosenberg.
UPS said its busiest day of the year will be December 20, with an estimated 28 million packages delivered. That would be up from 27 million on its busiest days last year. Typically, it handles 15.8 million packages daily.
“Once again, the popularity of e-commerce and mobile accessibility are likely to delay online shopping and compress deliveries into the final two weeks before Christmas,” UPS said in a statement.
This year, global economic weakening and concerns about expiring U.S. tax cuts could also keep more consumers waiting until the last minute and searching for discounts before ordering holiday gifts.
Retailers are keeping inventory fairly lean, so a bigger-than expected jump in demand could boost demand for the quick deliveries offered by UPS and FedEx.
UPS last week reported lower quarterly profit and “some uncertainty” about the strength of the coming holiday season.
FedEx, the No. 2 package delivery company, has said it plans to keep this year’s seasonal hires at 20,000, the same as last year, to handle volume that it expects will be 13 percent higher than last year.
Analysts said that while shipping volume is increasing, delivery companies face revenue constraints as frugal customers opt for cheaper shipping methods.
Reporting by Lynn Adler in New York; editing by Matthew Lewis