UPS and FedEx don't really have warehouse space for things to sit. The facilities are all designed to unload, sort, and load parcels as efficiently as possible.

Oftentimes the lines run in alternating inbound / outbound directions. The same conveyor belt that carries packages from an inbound regional trailer to a local delivery vehicle at 4am, might run in reverse at 8pm to carry local business pickups to the outbound regional trailer at 8pm.

If the packages from one flow can't clear the lines, the system could grind to a halt.

I worked at UPS during an unprecedented winter storm in the Pacific Northwest during the holiday season, and the only way to store packages in the system was inside the limited number of spare trailers that could be parked at the facility.

That's not totally true. They do support scheduled shipments for folks like Apple where the items are shipped but held to insure basically a global US delivery date for most packages in the batch. But this is pre-planned, normally at worldport etc.

UPS does indeed run a third-party-logistics (3PL) business, but I doubt that's able to be cannibalized to act as a buffer tank for their parcel business. (I also suspect that UPS's 3PL business is also booming this year. They reported Supply Chain & Freight as their fastest growing segment in Q3 earnings, growing 16.5% year-on-year, while US domestic grew "only" 13.8% with the note "continued elevated residential demand". SC&F is not solely domestic 3PL, so it's hard to be sure how that sub-segment is doing, but it's probably also under volume pressure.)

They do support scheduled shipments for a few customers who pay significant premium for that. What they cannot reasonably do is to do internal buffer for their own internal shipping capacity because the whole system simply is not designed for that. There is some somewhat significant and usually unnecessarily large capacity (because it is optimized for through-put, not storage efficieny) for warehousing of in-transit packages, but the current demand is so large that warehousing capacity is the limiting factor.

The key issue is that currently, any warehoused shipments will INCREASE ultimate required throughput rather than decrease it, because most holiday shipments need to arrive before 12/25, and the curve of shipments is increasing not decreasing.

So if you had some buffer, you'd be buffering into more constrained capacity rather than less. Buffering works better if you buffer into a quieter period. That's not this sitution. So yeah, backpressure needs to flow to shippers in terms of pricing etc.

Not universally true, unless it's changed recently due to Amazon weening away? My old neighborhood was effectively force taken over by UPS. All the houses were razed, and much of it is warehousing for storing items for third party suppliers.

This happened with Canada Post last holiday. Over 1000 container overflow in one sorting center in a major Quebec city alone. They really didn't catch up for 6-8 weeks after the holidays.

This was PRE COVID as well.

FIFO?

That wouldn't make any sense for FedEx/UPS though. If you get three packages in Atlanta, and the first and third are going to Los Angeles, and the second one is going to Birmingham, it makes a lot more sense to process package 1 and 3 together and probably take care of number 2 first.

That happens on the first sort.

You can't know what's going where to know to scan it in/ route it until after the first touch

They probably would do FIFO with overflow. The problem is that there’s no communication with the retailer about how long the delay would be.