If the Private Sector Is So Great, Why Did UPS Botch...

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REALITY CHECKS DECEMBER 26, 2013

If the Private Sector Is So Great, Why Did UPS Botch Christmas? A corrective for market triumphalists

At the heart of the great big pile-on of ridicule for the flawed healthcare.gov rollout the past few months was a large helping of private-sector triumphalism. Just imagine, the chorus went, if tech giants like Amazon or Google had been in charge of the Web site instead of those clueless, fusty bureaucrats – first, the problems would not have happened in the first place, but even if they had, the private sector would have held those responsible for the mistakes to account.

Bret Stephens wrote an entire column in the Wall Street Journal listing all the ways that the kludgy healthcare.gov launch had failed to live up to Amazonian standards: “For an ‘Amazon-like’ experience, it isn't enough to have a website that functions on the front end, the back end and in between. Nor is it enough to have a site that can handle 800,000 users a day without crashing, as the administration now boasts of the health site. Amazon.com handled 26.5 million purchases on Nov. 26, 2012, a company record and a rate of 306 items per second. You also need an Amazon-like culture, which is the product of other Amazon-like realities. Such as: Jeff Bezos as the boss, demanding results and innovation from his employees, providing results and satisfaction for his customers and shareholders.” California congresswoman Anne Eshoo, a Democrat, questioned the contractors’ excuse that the website’s problems had been exacerbated by the large number of visitors after the launch: “There are thousands of websites that handle concurrent volumes far larger than what HealthCare.gov was faced with,” she said. “Amazon and eBay don’t crash the week before Christmas, and ProFlowers doesn’t crash on Valentine’s Day.” And the Washington Examiner’s Philip Klein mocked healthcare.gov’s performance by noting that during the 2011 holiday shopping season, “nearly half of [large retail] websites (such as Amazon and eBay) were up 100 percent of the time. The lowest performing was Foot Locker, which was at 98.573 percent.” He added: “Imagine what a disaster it would be for sales if, during the holiday shopping season, Amazon’s website were down for about a day and a half.”

Yes, just imagine the disaster: the presents might not make it to people’s homes on time!

Oh, wait, what’s this I see in today’s papers?

A surge in online shopping this holiday season left stores breaking promises to deliver packages by Christmas, suggesting that retailers and shipping companies still haven't fully figured out consumers' buying patterns in the Internet era. Companies from Amazon.com Inc. to Kohl's Corp. and Wal-Mart Stores Inc., having promised to deliver items before Dec. 25, missed some delivery target dates. United Parcel Service Inc. determined late Tuesday that it wouldn't deliver some goods in time for Christmas, as a spike in last-minute shopping overwhelmed its system. "The volume of air packages in the UPS system did exceed capacity as demand was much greater than our forecast," a UPS spokeswoman said…. Although weather, Web glitches and late deliveries from manufacturers played a part in late deliveries, the sheer unanticipated volume of holiday buying this year may have been the biggest problem, retail analysts said.

…In notifications to some Amazon customers, UPS said there were some shipping delays because it had "not yet received the package from the shipper." "Amazon fulfillment centers processed and tendered customer orders to delivery carriers on time for holiday delivery," said an Amazon spokeswoman Wednesday. "We are reviewing the performance of the delivery carriers." The spokeswoman also said Amazon refunded any shipping charges associated with the impacted shipment and provided a $20 gift card. She declined to say how many customers had been impacted or offered such a rebate.

On Christmas Eve, Brandon Scott was still waiting for a 46-inch Samsung TV and Kate Spade watch he ordered from Amazon on Saturday. "I'm frustrated because these items could have easily been purchased at various retailers in my area, something I would have gladly done had Amazon not 'guaranteed' their arrival before Christmas," said Mr. Scott, of Ann Arbor, Mich.

Well, then. There’s little schadenfreude to be had in people being left empty-handed of presents to give their family and friends, or in underpaid, overworked warehouse employees and drivers rushing unsuccessfully to get the goods to their destinations on time. And as my colleague Jonathan Cohn noted recently, the comparison between healthcare.gov and Amazon was deeply flawed from the outset. But still, the Great Christmas Delivery Screwup of 2013 should inject a bit of perspective and humility into the ranks of the loudest private-sector champions. The fact is, the clichés are true: life is complicated, stuff happens and sometimes things don’t work out as planned. As amazing and wonderful as technology is, there are still limits to what is possible in narrow windows of time – sometimes you just need a few more weeks to get the complex new health insurance Web site for 36 states working properly, or you just run out of hours to beat Santa to the house – to millions and millions of houses. (And sometimes it’s not just the government web site that struggles with keeping personal information secure, but also one of the largest retailers in the country, in a breach far wider and more potentially damaging than anything that has happened with healthcare.gov.)

So, how about it: if not an outright truce, maybe some de-escalation of the anti-government triumphalism. And a little forgiveness all around. Happy Boxing Day.

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posted in: the plank, politics, amazon, ups, christmas, delivery, obamcare, aca, healthcare.gov

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PHOTO BY Lionel Bonaventure/AFP/Getty
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