Fred motivates the elves to make as many gifts as possible. Because of his injury, Nick is unable to deliver gifts. Feeling guilty, Fred decides to deliver the presents (as only a Claus can deliver the gifts).
To motivate the elves to make as many gifts as they can, Fred encourages them. However, due to his injury, Nick cannot deliver the presents.  Feeling guilty, Fred steps in and delivers the gifts himself, just like a true Santa Claus would.