United Parcel Service Inc. said it will spend more than $100 million to improve peak-period service after a late surge in online Christmas shopping caused missed deliveries that boosted costs.

With the delivery volume growth rate during the holiday period almost twice what UPS had projected, the company had to add 30,000 more workers than planned, boosting fourth-quarter expenses by as much as $150 million, Chief Executive Officer Scott Davis said today on a conference call. Some packages still didn’t arrive at their destinations by Christmas, causing refunds that sliced quarterly revenue by $50 million.

UPS, which today reported an 8.5 percent drop in fourth- quarter earnings, is expediting the introduction of technology that helps makes delivery routes more efficient and reduces miles driven; improving communication with shippers; and stepping up expansion of some facilities. The Atlanta-based company’s revenue for the quarter trailed analysts’ estimates.

“We are very confident we have put a plan in place that’s going to take care of the volume in 2014,” said Chief Operating Officer David Abney, who is leading the company’s evaluation of the peak crisis.

via UPS to invest more than $100 million after holiday service snarl