In late September, the IT company project44 published the latest of its monthly reports analyzing on-time parcel-delivery performance in the last-mile segment. The report found that 85.1% of shipments were delivered on time, the highest monthly levels since COVID-19 hit the U.S.
Project44 said that the last-mile market is currently in its best shape since before the pandemic, and that the results bode favorably for peak-season performance.
Historical trends — those that predate the pandemic — would argue against those takeaways. In the parcel-delivery world, a roughly 15% failure rate would be considered inferior to the point of catastrophic. Parcel-delivery carriers who cite on-time performance in the high 90% range would strenuously argue against any hint that an 85% on-time delivery rate is considered acceptable, especially in a day and age when shipping performance can be make or break for all stakeholders.
Jenna Slagle, senior data analyst, marketing for project44 and the executive managing the survey, said she understands how its results could be interpreted differently by shippers, retailers and carriers. The analysis has many moving parts, she said. Delays could originate on the retailer’s end and not be the fault of the carrier. Outlier shipments — such as outsize, difficult-to-handle consignments — could skew the results, she said. Retailers have narrowed their delivery windows, making it more challenging for on-time delivery commitments to be hit, she said.
Overhanging all this is the tremendous growth in parcel-delivery traffic from 2020 through 2022, which could have impacted on-time delivery performance, Slagle said. At various times during that span, on-time delivery performance fell under 80%, she said. It’s not a stretch to connect the slowdown in volumes during 2023 with the improvement in on-time performance, though there is no hard data to correlate the two, she said. The August data reflected a “pretty good” performance by the parcel-delivery ecosystem, she said.
On-time delivery performance is based on whether the consignee receives a package by the pre-committed day and time when the order was placed, according to project44.
Most of the packages were business-to-consumer transactions, though some business-to-business transactions may have been included in the analysis, she said. The sample universe exceeds 50 million parcels a month, which is a small slice of the total domestic parcel-delivery market.
The pre-COVID high for on-time performance stood at 88.3% in February 2020. The industry is beyond any COVID-related hangovers, Slagle said. She added that, based on project44 data, the on-time delivery rate in the mid-80% range will likely become the new normal for on-time delivery performance.