It’s hard to imagine how packages and mail deliveries were done on stagecoaches and by horseback riders in the early era; those times are long gone. A few decades later, in 1977, a key event that shaped our present situation occurred. U.S. legislation allowed air cargo to be deregulated. FedEx was able to create an air-based system that enabled small packages to be delivered overnight across the country.
So, how many packages are shipped in the United States?
Well, According to Statista, More than 21 billion packages were delivered in the United States in 2022. Assuming 365 days in a year, this means an average of about 58 million packages were delivered in the U.S. per day in 2022. One of the renowned companies, like USPS delivered 23.8 million packages per day in 2022. Another reputed company, UPS delivered 24.3 million packages per day on average in 2022.
First, let’s look at some statistics on parcel shipping volume and revenue in the U.S. According to Statista, parcel shipping volume in the U.S. reached 21.2 billion parcels in 2022, a slight decrease from 21.5 billion parcels in 2021, which was the highest in the last seven years. The decline was mainly due to the impact of the COVID-19 pandemic on consumer behavior and business operations. This represents almost a two percent decrease compared to 2021, when parcel shipping volume recorded the highest in the last seven years.
However, the volume is expected to rebound in 2023 and reach 22.1 billion parcels, as the economy recovers and online shopping continues to grow. The revenue is projected to increase to $189.8 billion in 2023, as the average revenue per parcel rises from $6.32 in 2022 to $6.43 in 2023. These numbers show that the U.S. is one of the largest and most dynamic markets for package delivery in the world.
Who are the main competitors and what are they doing to stay ahead in the packaging industry?
Well, there are three big names that you probably know: USPS, FedEx, and UPS. They are renowned packaging giants that have been dominating the market for decades, offering a range of services from freight forwarding and customs brokerage to express and ground delivery. However, they are facing some serious challenges from a new competitor that you also probably know about: Amazon.
Amazon is not just an online retailer but also a logistics powerhouse that has been building its own delivery network under the name “Amazon Logistics”. The company hired 275,000 full-time and part-time workers and even added 100,000 seasonal workers last December to keep up with the increasing demand, according to a report by the New York Times. Currently, Amazon delivers at least 67% of its package volume. Their next goal is to bump up that figure to 85% by the end of 2022.
To show how much Amazon Logistics has grown in the last few years, the company delivered 1.9 billion packages in the United States in 2019—which is a 155% year-on-year growth when compared to its parcel delivery volume in 2018. This netted Amazon over 53.7 billion U.S. dollars in revenue worldwide.
Amazon is not only competing with well-established competitors but is also innovating with new technologies such as drone deliveries, which could make shipping faster and more streamlined. The company has been testing its Prime Air service, which aims to deliver packages within 30 minutes or less using unmanned aerial vehicles. The service is not yet available to the public, but Amazon claims that it will be soon.
Finally, let’s talk about the expectations and experiences of the customers with package delivery. What do they want, and how do they feel about the service they receive?
Well, according to a survey by Accenture, one of the most significant drivers of change within the logistics industry is customer expectations, with 91% of companies acknowledging that customers are now asking for end-to-end logistics services handled by a single provider. Beyond traditional services like freight forwarding and customs brokerage, customers are now looking for logistics providers to also cover additional services such as reverse logistics, e-commerce management, and analytics capabilities.
Moreover, customers are expecting more from the companies they order from. 90% expect two- or three-day shipping to be standard, and 32% of global shoppers will abandon their carts if an estimated shipping time is too long. Customers also want more transparency and visibility over their orders, with 86% saying that tracking information is important and 49% saying that they would pay extra for live tracking.
Additionally, customers are becoming more conscious of the environmental impact that their orders cause, with 54% saying that they would choose a retailer that offers sustainable delivery options over one that does not. Customers are also willing to pay more for eco-friendly packaging, with 62% saying that they would pay up to 5% more and 18% saying that they would pay up to 10% more.
So, how satisfied are customers with the package delivery service they receive? Well, according to a report by Parcel Pending, the overall customer satisfaction with package delivery companies in the U.S. was 789 out of 1,000 points in 2022, a slight decrease from 791 points in 2021. The report also ranked the top performers in the industry, with FedEx Express taking first place with 807 points, followed by UPS with 801 points, and USPS with 774 points. Amazon Logistics was not included in the report, but it has been receiving mixed reviews from customers and drivers alike, with some praising its speed and convenience and others complaining about its reliability and safety.
So, there you have it. A brief overview of the package delivery industry in the U.S., with some facts, figures, and trends to keep you informed and entertained.
Until next time, happy shipping!