Pitney Bowes Parcel Shipping Index: Consumer Demand for “Real-Time Retail” Shakes Carrier Market Share
April 17 2024 - 7:00AM
Business Wire
U.S. Market Parcel Revenue Sees First Decline
in Seven Years Despite Increased Parcel Volume
Pitney Bowes Inc. (NYSE:PBI), a global shipping and mailing
company that provides technology, logistics, and financial
services, today released its annual U.S. Parcel Shipping Index,
which revealed significant shifts in the carrier competitive
landscape and consumer behaviors in 2023.
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2023 U.S. parcel volume ahead of
pre-pandemic predictions (Photo: Business Wire)
Of the four largest carriers (USPS, Amazon Logistics, UPS, and
FedEx), only Amazon Logistics grew volumes year-over-year, and by a
staggering 15.7%. One year after passing FedEx in parcel volumes,
Amazon Logistics has passed UPS and is gaining momentum on market
leader USPS.
Both Amazon Logistics and USPS experienced revenue growth, while
UPS and FedEx declined in both parcel volume and revenue.
Meanwhile, the “others” category comprised of smaller carriers
witnessed substantial growth in revenue and volume. Although Amazon
Logistics nearly tripled its shipping volumes from 2019 to 2023
(from 2B to 5.9B), it remains fourth in market share by revenue
($28.6B), generating less than half of UPS ($68.9B) and FedEx
($63.2B), foreshadowing a secular shift in the economics of last
mile delivery towards smaller parcels and cost-effective shipping
services.
“Despite the continued aftershocks of the COVID-19 pandemic,
persistent inflation, and pessimistic economic perceptions,
consumer spending remains resilient, primarily via a growing demand
for affordable goods from global marketplaces. The result is an
influx of smaller, less-expensive, lightweight packages which drive
up volumes at a lower rate of revenue-per-piece,” said Shemin
Nurmohamed, EVP and President, Sending Technology Solutions at
Pitney Bowes.
The four largest carriers shared more of the market with smaller
competitors in 2023, as "other” carriers saw their combined volumes
grow 28.5%. This was underscored by a 0.5% increase (to 21.7B) in
parcel volume alongside the first parcel revenue decline in seven
years (0.3% decline to $197.9B).
“The legacy players are still adapting as the delivery landscape
shifts to favor natively direct-to-consumer parcel networks that
are designed from the start to serve residential deliveries, such
as the USPS, Amazon Logistics and specialized/localized carriers,”
said Vijay Ramachandran, VP of Go-to-Market Enablement and
Experience at Pitney Bowes. “While parcel volume growth has
shifted from double to single digits, consumers’ appetites for
'real-time retail,’ or affordable goods that are brought to market
based on fast-moving trends, will continue to elevate parcel
volumes well beyond the effects of the pandemic.”
Nurmohamed added: “As shippers gain access to an array of
carrier options, multi-carrier platforms with recommendation
engines help them identify and select the best carriers for their
network and individual shipments, meeting customer demands
efficiently and cost-effectively. It’s what Pitney Bowes is
delivering for clients today.”
Carrier Volume
While U.S. parcel volume didn’t change significantly from 2022,
total volume was up 0.5% from 21.5 billion in 2022 to 21.7 billion
in 2023. Additionally, 2023 was the first time in the Index’s
history that Amazon Logistics—the only carrier that did not see a
decline—surpassed UPS in parcel volume.
- The USPS generated the highest parcel volume, at 6.6 billion
parcels and down almost 1% from last year.
- This was followed by Amazon Logistics generating 5.9 billion
parcels, up 15.7% from the previous year.
- UPS declined 10.3% from the previous year to 4.6 billion
parcels.
- FedEx declined 6.1% from 4.1 billion in 2022 to 3.9 billion in
2023.
- The “others” category grew 28.5% in 2023, from 0.5 billion to
0.6 billion parcels.
Market Share by Volume
- USPS continues to have the largest market share (31%).
- For the first time in the Index’s history, Amazon Logistics
became the second provider with the largest market share (27%),
surpassing UPS.
- UPS fell to third place with a 21% market share.
- The “others” category increased its share from 2% to almost 3%
of the market.
Carrier Revenue
In 2023, U.S. parcel revenue declined slightly for the first
time in 7 years by 0.3% from $198.4 billion in 2022 to $197.9
billion, reflecting high capacity built after the pandemic and
intense competition.
- UPS generated the highest parcel revenue of the major carriers
at $68.9 billion, down 6.4% year-over-year.
- This was followed by FedEx at $63.2 billion, down 3.1% from
last year.
- USPS increased 0.8% to $31.7 billion from $31.4 billion in
2022.
- Amazon Logistics grew 19% to $28.6 billion from $24 billion in
the previous year. It also saw the highest CAGR 2016 – 2023 at
60%.
- The “others” category had the most significant revenue growth
of 32.5% in one year, to $5.6 billion in 2023 from $4.3 billion in
2022.
Market Share by Revenue
- UPS had the largest parcel revenue market share, with 35% of
the market, a 2% decrease from 2022, followed by FedEx, with a 32%
share in 2023.
- USPS maintained its revenue market share of 16%.
- Amazon Logistics increased by two percentage points to
14%.
- The “others” category increased from 2.1% to 2.8%.
Forecast
- Pitney Bowes forecasts that U.S. parcel volume will reach
between 23 billion and 35 billion by 2029.
- The most likely scenario is that it will reach 29 billion with
a 5% CAGR between 2024 and 2029.
About the Pitney Bowes Parcel Shipping Index
The Pitney Bowes Parcel Shipping Index measures parcel volume
and spend for business-to-business, business-to-consumer,
consumer-to-business, and consumer-consigned shipments that weigh
up to 70 pounds (31.5 kg). Parcels are defined as shipments that do
not require special handling. The Index provides last-mile view of
parcels. Carrier revenue includes the cost to ship an item from its
point of origin to point of destination, and margins charged by the
carrier. This does not include the price value of the item being
shipped.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global shipping and mailing company
that provides technology, logistics, and financial services to more
than 90 percent of the Fortune 500. Small business, retail,
enterprise, and government clients around the world rely on Pitney
Bowes to reduce the complexity of sending mail and parcels. For the
latest news, corporate announcements, and financial results, visit
www.pitneybowes.com/us/newsroom. For additional information, visit
Pitney Bowes at www.pitneybowes.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240417690112/en/
Marifer Rodriguez Director of Communications
marifer.rodriguez@pb.com
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