LOS ANGELES, Dec 2 (Reuters) - The weak demand

bedeviling package delivery companies like United Parcel Service ( UPS )

and FedEx ( FDX ) promises to be great news for online

U.S. shoppers who want quick, on-time holiday gift delivery.

Barring an unexpected surge in online gift buying due to

severe winter storms, major delivery firms are well-positioned

for on-time delivery performance to approach 100%, said Satish

Jindel, founder of shipping consultancy ShipMatrix.

"As long as the weather holds up and people are able to go

to stores, the parcel carriers should have no trouble handling

the volume," said Jindel, who added that in-store shopping also

reduces the likelihood of generating returns, another source of

holiday package shipments.

UPS, FedEx ( FDX ) and other delivery firms will handle nearly 2.2

billion deliveries and returns between Thanksgiving and New

Year's Eve, said Jindel, who helped found the delivery firm that

became FedEx Ground.

Those delivery firms have been battling stubbornly soft

demand since the early COVID-19 pandemic's e-commerce bubble

deflated in 2022. Their top customers include major retailers

like Amazon.com ( AMZN ), Walmart ( WMT ), Target ( TGT ) and

Macy's.

The peak holiday season that typically stretches from

Thanksgiving to Christmas is high-stakes for delivery companies

that can see daily package volumes double, and for retailers

that can reap more than half of their annual revenue during the

period.

The package carriers have plenty of capacity to manage this

year's holiday rush. They are prepared to handle 120 million

parcels per day during the peak holiday season, while demand is

estimated to be just 106 million packages per day, according to

ShipMatrix.

Expectations for overall holiday retail sales also are muted

as higher prices for housing, food and other necessities strain

personal budgets. Consulting and accounting firm Deloitte

estimated that retailers could notch their slowest holiday sales

growth since 2018. And, shoppers are returning to pre-pandemic

in-store shopping habits.

There are fewer days for holiday shopping and delivery this

year because Thanksgiving falls later in November than usual.

While that gives delivery firms less time to get gifts to

doorsteps before Christmas, the time crunch also could mean that

more people buy gifts in stores to be certain they have

purchases safely in hand.

UPS CEO Carol Tome in October said the company's retail

customers have tempered forecasts for the number of holiday

packages they'll hand to the carrier for delivery because the

shortened shopping season could translate into more in-store

versus online purchasing this year.

Any major storms that hit in mid- to late December could

delay gift deliveries and keep shoppers away from malls and

other retail centers. That could spark a last-minute surge in

demand for e-commerce deliveries, which could collide with

flight delays, road closures and treacherous driving conditions

that impede deliveries, experts said.