CHICAGO (Reuters) - United Parcel Service Inc (>> United Parcel Service, Inc.) plans to hire up to 95,000 workers to handle additional business during the holiday season this year, the package delivery company said on Tuesday.

Analysts and investors will watch closely to see how the Atlanta-based company performs this year after two disappointing peak-season performances in a row.

Shares of UPS were up 3 percent at $99.93 in morning New York Stock Exchange trading.

In 2013, a late surge in e-commerce packages and severe winter weather caught UPS by surprise, leaving more than 1 million packages stranded on Christmas Eve. Main rival FedEx Corp (>> FedEx Corporation) experienced problems the same year but on a much smaller scale.

Last year, UPS invested more than $500 million in its network to prepare for the peak season and worked closely with retailers to forecast package volumes. The company also hired 100,000 temporary employees for an anticipated package surge that failed to materialize, hurting fourth-quarter earnings.

Memphis-based FedEx did not report any problems for its 2014 peak.

UPS has said it is working this year with retailers to improve forecasting and will introduce surcharges for residential packages during the peak season.

The peak package season starts in November in the run-up to the holidays and ends in January after a slew of post-Christmas returns.

(Reporting by Nick Carey; Editing by Lisa Von Ahn)

Stocks treated in this article : FedEx Corporation, United Parcel Service, Inc.