Welcome to Data File. In this weekly feature, The Current shares key findings shaping the ecommerce landscape. At The Current, we comb industry, analyst and economic sources for the data that matters to ecommerce professionals, and include it throughout our work. This feature is one of the ways we’re sharing what we find.
As ecommerce expands, the number of packages being shipped keeps growing.
US parcel volume grew 6% in 2021, according to data released this week from the Pitney Bowes Parcel Shipping Index.
The 21.5 billion packages shipped was a new record, up from 20.3 billion in 2020, according to the data. To put it in perspective, that means 59 million parcels were generated each day, and 683 parcels were generated each second. And it means 166 parcels shipped per US household during the year, according to Pitney Bowes.
Pitney Bowes said online shopping was driving the uptick in parcels. At the same time, the new record came in a year of supply chain challenges, demand fluctuations driven by spending on goods and the beginnings of inflation.
“Last year saw the industry rocked by outside influences as carriers continued to manage the impact of the pandemic,” said Jason Dies, EVP and president of Sending Technology Solutions at Pitney Bowes. “Despite these challenges, carrier revenues and parcel volumes reached a record high, showcasing the resiliency of the US consumer and the industry’s ability to absorb their growing appetite for internet retail.”
Looking ahead, Pitney Bowes forecasts US parcel volume to reach 25-40 billion by 2027, with a 5%-10% CAGR each year from 2022-2027.
Collectively, the carrier firms that deliver packages collected $188 billion in parcel revenue in 2021, a 16% increase year-over-year from $163 billion, according to Pitney Bowes. UPS generated $70 billion in revenue, while FedEx earned $62 billion, the US Postal Service recorded $31.5 billion.
In a year when it built out significant new capacity, Amazon Logistics grew revenue to $22 billion, a 19% year-over-year increase. However, growth of parcel volume slowed to 13%, down from 112% in 2020.
This underscores Amazon’s unique role as both a marketplace for sellers and a logistics provider. The company’s delivery network continues to include a mix of its own delivery services and outside carriers. Pitney Bowes offered a breakdown of volume in each. In all, Amazon generated 8.4 billion parcels in 2021. Of those, 57% or 4.8 billion parcels were delivered by Amazon Logistics, while 43%, or 3.6 billion parcels, were passed to carriers for last mile delivery. This was up from 2020, when Amazon passed 2.8 billion parcels to carriers for last mile delivery.
There are signs of a shift within Amazon's logistics network so far this year. In its first quarter earnings call, the company reported excess capacity in its logistics network after a buildout to coincide with the uptick in demand during the pandemic.
"During the pandemic, we were facing not only unprecedented demand but also extended lead times on new capacity. And we built toward the high end of a very volatile demand outlook," CFO Brain Olsavsky told analysts on the company's earnings call. "Now that demand patterns have stabilized, we see an opportunity to better match our capacity to demand."
Within the Fulfilled by Amazon program, which stores and ships packages for third-party sellers, the company made changes to sizing regulations, and added a fuel surcharge at a time of 40-year-high inflation. At the same time, the company is looking to continue building. It created a venture fund to invest $1 billion in logistics. But the biggest potential for growth this year could come as a result of Buy With Prime. The new Amazon service will embed Prime's two-day delivery and checkout capabilities on websites beyond Amazon, opening up its fulfillment and delivery services to a large new market.
The Parcel Shipping Index also showed notable growth for smaller carriers. The combined parcel volume of carriers outside the top four grew by 94%, the data showed.
When it comes to market share for the carriers, here’s the breakdown:
- By revenue, UPS had the highest parcel market share, with 37%. This was followed by FedEx with 33%, USPS with 17% and Amazon Logistics with 12 percent.
- By parcel volume, USPS had the highest market share (32%, down from 36% in 2020), followed by UPS (24%, the same as 2020), Amazon Logistics (22%, up from 21% in 2020) and FedEx (19%, up from 18% in 2020)
(Infographic by Pitney Bowes Parcel Shipping Index)
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