The National Retail Federation forecasted that total holiday spending from November 1 to December 31 would surpass $1 trillion for the first time, with growth of 3.7% to 4.2% over 2024. Meanwhile, Adobe Analytics reported that consumers spent $257.8 billion online for the same period, up 6.8% year-over-year and setting a record for e-commerce.

From a volume perspective, the 2025 holiday season did not see record parcel volumes but instead a modest gain driven by e-commerce. FedEx Chief Customer Officer, Brie Carere, told analysts on December 19, “Right now, we are basically running right on our forecast for peak, which we had predicted was a mid-single-digit year-over-year growth on average daily volume.” Carere further noted that following Black Friday, volumes were “very strong,” but the second week was a little bit softer. “But we have seen building momentum in the last week,” said Carere.

As evidence of what Carere told analysts, consumers concentrated their purchasing around promotional events such as Black Friday and Cyber Monday. Adobe Analytics reported that Cyber Week sales (the five days from Thanksgiving to Cyber Monday) totaled $44.2 billion, up 7.7% year over year.

Despite record sales, consumers appeared inclined to use solutions such as Buy Online, Pick Up in Store (BOPIS) to either avoid shipping costs or simply purchase more items in-store.

Adobe Analytics reported that curbside pickup was used in 17.1% of online orders this holiday season, slightly down from 17.5% during the 2024 holiday season. However, curbside pickup peaked on December 23rd, accounting for 39% of online orders as shoppers used the service to ensure they got gifts on time, despite some carriers, such as Amazon, offering delivery on Christmas Eve. But even Amazon sent out a warning: “For customers shopping on Christmas Eve, make sure to shop early in the day as delivery windows are subject to availability and can sell out early in some areas when demand is high.”

UPS, FedEx, the United States Postal Service, and Amazon’s in-house delivery network all have invested heavily in automation, network optimization, and peak planning well ahead of the holidays. These investments paid off in the form of strong on-time performance during the core weeks of peak. Industry data showed that on-time delivery rates remained high through early and mid-December, with most national parcel carriers delivering most shipments within promised service windows. For shippers, this reliability helped maintain customer trust.

That said, there were localized disruptions that impacted certain regions and service levels. Winter storms in parts of the Midwest, Northeast, and Mountain regions of the US slowed some ground transportation and disrupted air operations at key hubs during critical shipping windows.

Surcharges

Parcel carriers implemented higher peak-season surcharges reflecting rising labor costs, increased residential delivery density, heavier parcels, and ongoing investments in automation and sustainability. UPS and FedEx applied various surcharges, including demand surcharges, peak additional handling fees, and peak surcharges for oversized and non-conveyable packages. The USPS also introduced temporary peak pricing adjustments across key parcel products, adding to overall holiday shipping expenses.

Once again, many retailers absorbed a portion of the increased costs to remain competitive on free or discounted shipping offers. In contrast, others passed surcharges on to consumers through higher minimum purchase thresholds or holiday shipping fees. Profit margins were particularly squeezed for small and mid-sized e-commerce sellers that lacked the volume leverage to negotiate favorable carrier agreements. As a result, cost management became just as critical as capacity planning during the 2025 peak season.

Managing Returns

Returns also remained a major challenge for shippers and parcel carriers. Adobe Analytics noted declines in returns during the early holiday season, but return volume picked up in the days following Christmas Day (December 26 to December 31), increasing 4.7%.

While returns happen throughout the year, it is typical to see a surge in returns following Christmas, often extending peak-like conditions well into January.

Many retailers relied on automated returns platforms and flexible drop-off options to manage this influx, but returns still represented a significant operational and financial burden.

Defining Success

Shippers that performed best during the 2025 holiday season were those that embraced proactive planning and carrier diversification - often beginning planning immediately after the holiday peak season. Successful shippers were also those that secured carrier capacity well in advance, locked in service guarantees, and diversified volume across multiple parcel carriers to reduce dependency on a single network.

Consumer expectations continued to shape carrier and shipper strategies throughout the season. Shoppers increasingly expect fast, low-cost, and highly transparent delivery options year-round. Real-time tracking, accurate delivery estimates, and proactive communication are also important for maintaining customer satisfaction. Retailers that clearly communicated shipping cutoffs, potential delays, and alternative fulfillment options generally experience higher customer loyalty than those that overpromised delivery timelines.

The holiday season also highlighted how parcel carriers continue to refine their networks to handle peak demand more efficiently. Automation played a big role, including advanced sortation systems, AI-driven routing, and improved demand forecasting, helping carriers to sort and deliver more dynamically. Regional sortation hubs and expanded weekend delivery options also allowed carriers to process parcels closer to their final destinations, reducing transit times at national hubs.

2026 Planning

Planning for the 2026 holiday season is underway for many shippers. Some thoughts to consider when planning include:

• Plan for the unexpected, such as weather-related delays, surges, or volume declines.
• Ensure carriers receive accurate parcel volume forecasts.
• Ensure warehouses are ready. Peak-season labor plans should include flexible staffing models, cross-training, and automation, where feasible, to maintain throughput during higher volumes.
• Establish a returns management strategy that includes capacity and data visibility across the network, enabling shippers to recover value faster and maintain customer satisfaction.

Jay Kent is the founder of SLB Performance, a business advisory company that helps companies lower their costs and drive shareholder value for the company. Jay has more than 25 years of experience in growth and turn-around companies with deep expertise in supply chain, global/domestic transportation, operations, omnichannel, retail, B2B, third-party logistics, vendor management, manufacturing, procurement, contract sales, industrial engineering, inventory planning/allocation, technology deployment, wholesale, and C-Suite executive leadership for medium to Fortune 150 companies.

This article originally appeared in the January/February, 2026 issue of PARCEL.