UK online shopping spree could create delivery problems

By Esha Vaish and Aastha Agnihotri

Nov 28 (Reuters) - Britons are being warned to place onlineholiday-season gift orders much earlier this year to avoiddisappointment, as doubts emerge about the ability of deliverycompanies to handle an expected surge in volume.

UK online sales this holiday season are expected to jump 18percent, according to the Centre for Retail Research (CRR), asmore shoppers use mobile apps to order clothing, books andgadgets.

Delivery firms say they are boosting capacity and coming upwith new ways to handle a last-minute rush, but the high cost oftemporary labour and vehicles also makes them cautious aboutover-investing.

"I think there will be an acute problem this year," saidJoshua Bamfield, the CRR's director.

Holiday demand aside, the government estimates the truckingindustry is short of 60,000 drivers, in part due to newcertification rules.

Justin Zatouroff, head of logistics at KPMG, says firms maybe forced to turn away business if e-retailers exceed volumeforecasts.

Signs of strain are already emerging.

UK Mail Group Plc, whose customers use eBay Inc and Amazon.co.uk, is not accepting deliveriesfor Dec. 25 and Dec. 26. Collections made on Christmas Eve willbe delivered only by Dec. 29. (http://bit.ly/1HpYtcc)

Meanwhile, parcel companies are coming up with new ways theyhope will help them get over the hump.

United Parcel Service Inc and Yodel, for example,are allowing customers to pick up parcels at places such aspetrol stations, newsagents and convenience stores - a methodcalled "click-and-collect" - thereby saving on the cost ofdelivering to single addresses.

Click-and-collect could make up 25 percent to 40 percent ofonline non-food sales this Christmas, said Alex Smith-Bingham ofconsulting firm Capgemini.

Such sales - popular with shoppers, who need not stay hometo accept delivery - will be worth about 3 billion pounds ($4.7billion) this year, up from 2.1 billion pounds last year,according to eBay.

UK Mail and DPD, part of France's La Poste, havecome up with another solution - one-hour slotted delivery.

E-retailers too are coming up with new contingency plans.

Items bought from 65,000 eBay sellers can be collected fromArgos stores, while Amazon has signed up for newspaperwholesaler Connect Group Plc's same-day parceldelivery service.

Despite all the planning, driver and distribution staffshortages mean any sudden volume spike could create problems.

"There are signs in the market that emergency/unplannedcover is becoming subject to shortages," said Simon Harper,operations director at TNT UK, a unit of TNT Express NV.

An indication of demand will emerge over the next few days.

Visa Europe expects Britons to spend 518 million poundsonline using Visa cards on Friday, making it the biggest dayever for e-commerce in the UK. The credit card company said itexpects a further 500 million pounds to be spent on Monday.($1 = 0.6370 pounds) (Editing by Ted Kerr)