After being bested by Memphis-based FedEx two years running in Christmas present on-time delivery, Atlanta's United Parcel Service trumped its chief rival this holiday season, reports Reuters.

In the week before Christmas, UPS had an on-time delivery rate of 97 and 98 per cent - its normal day on-time rate. But FedEx struggled because of "surge of last-minute e-commerce shipments".

"It seems like the third time's a charm for UPS," said Kent Winegar with nearly US$15 million in UPS stock. "But if e-commerce keeps growing at such a rapid rate we'll see how they do next year."

Last year, UPS spent $500 million, increased seasonal hiring and worked to forecast package volumes that failed to materialise while overspending hurt fourth-quarter profit. Meanwhile, FedEx had few problems.

UPS spokesman Steve Gaut said this year his company had a "disciplined approach" to peak season, that included pulling delivery dates forward on days when it had excess capacity.

UPS also warned retailers of hard cut-off dates for packages to make it by Christmas using UPS' cheaper ground delivery service. Thus, many retailers stopped free shipping a week before Christmas.

Noelle Sadler, marketing chief at online clothing retailer LuLu's, said they stopped free shipping over a week before the holidays because they had to follow UPS rules.