The latest insights from the Pitney Bowes Parcel Shipping Index shed light on the evolving landscape of parcel delivery. It's clear that the interplay of shifting consumer behavior and carrier dynamics is significantly reshaping the industry— but what does that mean for you? In this post, we'll share the findings of the Pitney Bowes report and show you how UPS's decrease in market share can help you increase your cost savings.

Amazon's very successful year

In 2023, Amazon Logistics shipped 5.9 billion parcels— second only to USPS' 6.6 billion. Despite its second-place status, it's the only carrier of the Big 4 (also including USPS, UPS, and FedEx) to show an increase in parcel volume over 2022. While USPS, UPS, and FedEx saw 0.9%, 10.3%, and 6.1% declines, Amazon increased its parcel volume by 15.7%.

And its bottom line benefitted even more. From 2022 to 2023, Amazon Logistics' revenue grew 19%, from $24 billion to $28.6 billion.

What can we learn from Pitney Bowes Parcel Shipping Index about the state of the parcel industry?

Vijay Ramachandran, VP of Go-to-Market Enablement and Experience at Pitney Bowes, explained, "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."

Despite Amazon Logistics' impressive parcel volume and revenue increase, the online retailer is responsible for only 14% of the market share by revenue. UPS and FedEx control 35% and 32%. Why is Amazon earning so much less while shipping more? Shemin Nurmohamed, EVP and President of Sending Technology Solutions at Pitney Bowes, has the answer. She says, "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."

What does Amazon's success mean for your relationship with FedEx and UPS?

Amazon Logistics is the king of "real-time retail," so if Ramachandran's analysis is correct, the online retailer's success will only continue to grow. However, at present, Amazon Shipping is only available to Amazon Sellers.

[Amazon's success in the parcel delivery industry has significant implications for your relationship with FedEx and UPS. With FedEx and UPS experiencing declines in parcel revenue and volume, the current scenario presents an opportune moment to reconsider your existing parcel contracts.

After more than 30 years in the industry, we're experts in discovering savings others miss. Contact ShipRx for a free savings analysis today, and find out how you can pay less for shipping.