U.S. parcel revenue has seen the first decline in seven years despite increased parcel volume, according to an annual report from Pitney Bowes.
The U.S. Parcel Shipping Index, released Wednesday by the global shipping and mailing company, highlighted 2023’s shifts in the carrier-competitive landscape and consumer behaviors. U.S. parcel revenue fell 0.03% from $198.4 billion in 2022 to $197.9 billion last year despite a slight parcel volume increase of 0.05% from 21.5 billion in 2022 to 21.7 billion in 2023.
Pitney Bowes expects U.S. parcel volume to reach between 23 billion and 35 billion by 2029.
Of the four largest carriers — the U.S. Postal Service, Amazon, UPS and FedEx — only Amazon grew volumes year over year at 15.7%. Amazon and the Postal Service both saw revenue growth, but UPS and FedEx experienced declines in parcel volume and revenue.
Amazon nearly tripled its shipping volumes from 2019 to 2023 — from 2 billion to 5.9 billion parcels — but it lags behind in terms of revenue. It generated $28.6 billion in revenue, less than half of UPS’ $68.9 billion and FedEx’s $63.2 billion, which Pitney Bowes says foreshadows “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,” Shemin Nurmohamed, a Pitney Bowes executive vice president and president, said in the report.
UPS had the largest parcel revenue market share with 35% of the market followed by FedEx with 32%. The Postal Service maintained its share with 16% and Amazon increased two percentage points to 14%.
Carrier volume
Pitney Bowes found:
- The Postal Service handled 6.6 billion parcels, a nearly 1% decrease from 2022.
- Amazon handled 5.6 billion parcels, up 15.7% from 2022.
- UPS handled 4.6 billion parcels, down 10.3% from 2022.
- FedEx handled 3.9 billion parcels, down 6.1% from 2022.
- The “others” category handled 600 million parcels, a 28.5% increase from 2022.
Carrier revenue
Pitney Bowes found:
- UPS generated $68.9 billion, down 6.4% from 2022.
- FedEx generated $63.2 billion, down 3.1% from 2022.
- The Postal Service generated $31.7 billion, up 0.08% from 2022.
- Amazon generated $28.6 billion, up 19% from 2022.
- The “others” category generated $5.6 billion, up 32.5% from 2022.