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Massive overcapacity expected to hit holiday parcel delivery market

September 20, 2022

READ FULL ARTICLE AT » FreightWaves

Parcel delivery carriers will be confronting massive excess capacity during the peak shipping season and will face severe financial repercussions if they don’t align their resources with what are expected to be flat year-over-year volumes, transportation consultancy ShipMatrix said Monday.

In its annual forecast for peak season activity, ShipMatrix said the market will be saturated with 110 millions of parcel capacity per day. However, daily demand is likely to average 92 million parcels per day. This will create an 18 million daily capacity surplus that will be difficult for carriers to offset without cost reductions.

The 2022 forecasts are in sharp contrast to the 2020 and 2021 peak seasons, when daily demand exceeded capacity by 7.2 million and 1.3 million parcels, respectively, ShipMatrix said.

The flat year-over-year demand is due to more consumers returning to in-store shopping and changes in delivery patterns to reflect more shipments going to stores instead of residences, ShipMatrix said.

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