Carriers hit breaking point as package volume soars

The USPS is taking packages that UPS and FedEx won’t and has doubled its e-commerce market share since early October—and has seen a corresponding decrease in on-time performance, Krieg said. USPS grew from 9% of e-commerce parcel shipments the week of October 9 to 20% the week of November 27, according to Convey data. On-time performance dropped to 78% the week of November 27, down from 87% the week prior, and down from 94% the week of October 9.

For shippers, the problem is compounded because alternates to the “big three” carriers also face capacity constraints and can’t take on new business.

“The breaking point is here,” Krieg said, noting that USPS performance had remained solid through October but suffered from a spike in volume from mail-in ballots for the recent Presidential election followed quickly by Black Friday and Cyber Week.

The effects are also being seen in Convey’s “click-to-deliver” metric, or CTD, which measures the time from when a consumer hits purchase to when the item gets delivered. It takes into account both fulfillment and transit time, and Krieg says fulfillment has experienced the biggest jump in recent weeks, increasing 72% from November 10 to December 8.

“This is largely due to the holiday peak surge of packages that are sitting on docks or waiting to be picked up by carriers,” he said.

Consumer expectations are being affected, and retailers’ cries to shop early this year are being followed by early order cut-offs for guaranteed holiday delivery. Other strategies include leveraging curbside pickup and click-and-collect fulfillment options.

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