Revenue growth for U.S. parcel shipping lagged volumes last year as an influx of new last-mile delivery companies put downward pressure on prices in a market that is expected to grow 36% by 2030, according to an annual industry report from Pitney Bowes.
Smaller carriers are increasingly taking market share from legacy carriers FedEx, UPS and the U.S. Postal Service, but their biggest threat is Amazon. The retailer’s logistics operation handled 6.3 billion parcels in 2024, up 7.3% year over year, and is expected to overtake the Postal Service by 2028, Pitney Bowes (NYSE: PBI) said in its recent Parcel Shipping Index.
The provider of mail and parcel shipping services, technology and equipment said U.S. parcel volume increased 3.4% to 22.4 billion shipments last year and estimated it will grow 5% per year to $30.5 billion in 2030. Revenue, however, grew 2.7% last year to $203.2 billion.
Carriers are increasingly offering competitive pricing to attract customers, leading to lower revenue. Carrier revenue per parcel ticked down to $9.09 down from $9.10 in 2023, according to Pitney Bowes. Independent couriers gaining market traction in recent years include OnTrac, Better Trucks, Jitsu, Veho, SpeedX, Speedy Delivery and UniUni. Many of them are startups or provide regional service with lower overhead than national carriers. The U.S. Postal Service’s new lost-cost shipping option, Ground Advantage, has also contributed to the pricing pressure.
“Since Pitney Bowes began tracking shipments a decade ago, the parcel market has been dominated by FedEx, UPS and USPS. We are witnessing a turning of the tide, evidenced by the nearly 40% volume growth in the five-year compound annual growth rate of [alternative] carriers,” said Pitney Bowes Executive Vice President Shemin Nurmohamed, in a news release. “This disruption presents a unique opportunity for businesses to take advantage of competitive pricing.”
The Pitney Bowes findings echo earlier research from parcel management and consulting firm ShipMatrix Inc. It put domestic parcel revenue at $188 billion and average revenue per parcel at $8. Domestic parcel volumes will grow at a compound annual rate of 4% over the next three years, with Amazon, Walmart and other carriers winning the lion’s share of new business. FedEx, UPS and the U.S. Postal Service will likely experience flat to negative growth, ShipMatrix said.
The U.S. Postal Service retained its hold as the largest parcel carrier by volume with 6.9 billion shipments in 2024, an increase of 3.4% from the prior year, per Pitney Bowes. UPS volume increased 1.7% to 4.7 billion pieces. FedEx was the only carrier to experience a year-over-year decline, with 3.9 billion parcels compared to 3.7 billion in 2023. The combined volume for other small couriers jumped 23% to 800 million pieces.
The Postal Service is the market share leader by volume at 31%. Amazon moved up a point to 28% of the market, followed by UPS with a 21% share. FedEx’s market share fell a point to 17%, while “other” carriers moved from 3% to 3.5%.
UPS led domestic carriers with $69.8 billion in revenue, followed by FedEx, at $63.2 billion, the Postal Service at $32.3 billion and Amazon Logistics at $31.1 billion. From a revenue standpoint, UPS controls 34% of the market. UPS and FedEx lost about 1% in revenue market share in 2024, while revenue market share for Amazon increased 1 point to 15.3% and from 2.8% to 3.4% for “other” carriers.
Domestic parcel growth slowed to 0.4% in the first quarter, according to Pitney Bowes’ figures. Weather disruptions and a freeze on handling shipments from China and Hong Kong valued below $800 after a change in U.S. tariff policy contributed to a 6.2% drop in U.S. Postal Service volumes. Meanwhile, UPS volumes declined 5.4% after the company began to implement a 50% service cut for its Amazon account.
Pitney Bowes used quarterly and annual financial reports from the major carriers, quarterly operational data from the Postal Service, and data from Shein, Temu and other sources to compile the Parcel Shipping Index. FedEx operates on an unusual fiscal year, so its figures are based on December through November instead of a traditional calendar year. The report counts shipments weighing up to 70 pounds.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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