The three major parcel carriers’ peak-season delivery performances for the week ending Dec. 11 were roughly in line with the prior week’s levels, while the U.S. Postal Service reported the best year-over-year improvement, according to data published Friday by consultancy ShipMatrix Inc.
From Dec. 5-11, the Postal Service clocked in with an on-time rate of 95%, up from 87.5% during the same period in 2020 though slightly below the prior 2021 week. UPS Inc. (NYSE: UPS) reported a 95.8% on-time rate, down slightly from 96.1% both in the prior week and the year-earlier period. FedEx Corp. (NYSE: FDX) reported an on-time delivery rate of 84.8%, up slightly from the prior week’s levels but down more than 9 percentage points from the 2020 period, according to the ShipMatrix data.
ShipMatrix President Satish Jindel said the Postal Service’s year-over-year improvement is due to the agency implementing a major expansion in parcel processing capacity during the year. In addition, the Postal Service has not been deluged like it was in 2020 by traffic diverted to it by large shippers whose volumes had been capped by FedEx and UPS.
The widespread media reporting throughout the fall of supply chain bottlenecks along the West Coast and parts of the East Coast played a key role in persuading consumers to start their holiday shopping earlier than normal, taking much of the traditional peak-season pressure off the parcel-delivery ecosystem, Jindel said. In addition, more holiday merchandise is being delivered to stores to support a year-over-year increase in brick-and-mortar shopping, he said. As a result, parcel carriers can ship large volumes at one time to a central location rather than being forced to deliver one or two packages to each residence.
The ability to avoid making multiple stops at each residence has been a key factor in boosting delivery performance across the board, but especially for the Postal Service, which by law must pick up and deliver to every U.S. address.
The carriers’ delivery performances were skewed by their shipping policies, especially at FedEx. For example, FedEx’s performance would have jumped nearly 13 percentage points if it had extended its FedEx Ground unit’s delivery commitment to four days from three, and had classified all next-day deliveries as being on time regardless of whether a parcel was delivered by 8 a.m., 10:30 a.m. and 3 p.m., the three delivery deadlines for the unit’s next-day service.
UPS and the Postal Service had already made that adjustment to their ground services, Jindel said. At this point in the cycle, consumers are not going to push back if a parcel is delivered by ground in four days and not three, he added.