Pitney Bowes began tracking US shipping volumes in 2016. Through three different White House administrations, three different postmaster generals, breakthroughs in shipping management and tracking technology, automation, robotics and self-driving vehicles, the volatility of a global pandemic, supply chain disruptions, and inflation – the steady growth of parcel shipping as measured by the total volume of packages shipped, received, and occasionally returned continues its historic climb.
Only once in eight years have US parcel volumes declined from the year prior. In 2022, they dropped slightly from record-setting growth in the two years prior when the COVID-19 pandemic led to voluntary and government-mandated lockdowns, and an exponential spike in online shopping.
Some industry executives and analysts lamented this brief decline in year-over-year volumes. They had hoped that COVID-era e-commerce trends were the new norm and rapid growth would continue indefinitely, or at least for a longer period of time.
Because of these outsized expectations, some of our colleagues have grown discouraged. If you are one of them, the chart below should be encouraging. It clearly indicates that the pandemic did in fact change behaviors in a lasting and positive way for parcel shippers. The fact is US parcel volumes remain on a trajectory that far outpaces predictions made prior to the pandemic.
The continued growth of our industry, along with continuously evolving consumer shopping behaviors, is changing parcel carrier dynamics. We see this most acutely in the growth of Amazon Logistics and the speed with which new carriers are entering the market.
When Pitney Bowes issued its first Shipping Index in 2016, Amazon had already overtaken eBay as the most popular online marketplace in the US, and we watched Amazon extend its popularity globally. Today, Shein, Temu, and a number of other emerging marketplaces and other “fast fashion” retailers are attempting to challenge Amazon’s prowess with varying levels of success.
The trajectory of its marketplace and competitive threats from other global players was relatively predictable when we issued our first report, but very few could have anticipated the birth and exponential growth of Amazon as a leading shipping and last-mile delivery provider.
In 2023, 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%. Two years after passing FedEx in parcel volumes, Amazon Logistics has passed UPS and is gaining momentum on market leader USPS. Meanwhile, smaller last-mile carriers (those other than the big four) collectively experienced substantial year-over-year growth – 32.5% revenue growth and 28.5% volume growth.
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.
Those are all facts. Now, some predictions.
Consumers demonstrated an insatiable appetite for “real-time retail” in 2023, resulting in an influx of smaller, less-expensive, lightweight packages in the marketplace and a wider array of last-mile delivery providers bringing them to shipping docks and front doors. While parcel volume growth has shifted from double to single digits, our Index projects that consumers’ appetites for “real-time retail,” or affordable goods will continue to elevate parcel volumes into the years ahead.
As the carrier landscape becomes slightly more crowded and vastly more competitive, high-quality data and shipping management software, including dynamic tracking capabilities, will become even more important to a wider array of office shippers, retailers and – for the efficiencies these technologies create – consumers.
For example, as shippers of all sizes gain access to an array of carrier options, multi-carrier platforms with recommendation engines will help shippers identify and select the best carriers for their network and individual shipments, meeting customer demands efficiently and cost-effectively.
Based on closely and accurately monitoring parcel volumes for the past eight years and making reasonably good predictions over that period, this is some of what we expect in the years ahead. Obviously, it is easier to count parcels that have already shipped than it is to predict the number of parcels that will ship. Nonetheless, I hope the steady and persistent growth trajectory of parcel volumes over the eight-year history of the Index gives everyone reading this a sense that they are in the right industry at the right time.
Shemin Nurmohamed is EVP and President, Sending Technology Solutions at Pitney Bowes, a global shipping and mailing company that provides technology, logistics and financial services to more than 90 percent of the Fortune 500. She is dedicated to helping working women progress in their careers and has authored a book (Outshine published by FAQ Books, 2017) and given a TEDx Talk on the subject.
This article originally appeared in the July/August, 2024 issue of PARCEL.
