Retailer delivery networks erode FedEx and UPS market share, notes ShipMatrix report

A report recently issued by ShipMatrix, a subsidiary of Warrendale, Pa.-based SJ Consulting, points to an increasing shift in the parcel marketplace that is having an impact on the parcel duopoly of FedEx and UPS.

That shift relates to how the private fleets of major retailers, “are collectively delivering billions of parcels to consumers that have reduced the addressable market for FedEx and UPS,” calling it “an unpredictable trend ten years ago.”

In perhaps the two biggest takeaways of the report related to this shift, the firm explained that, “Amazon Logistics, Walmart, Target with their private networks and smaller carriers like OnTrac, Better Trucks, Jitsu, Veho, etc. with their impressive volume growth of 4.0 times since 2019 have significantly reduced the market share of FedEx, UPS and USPS,” adding that, “Amazon delivered 6.1 billion packages in 2024 as compared to 1.7 billion in 2019, while Walmart mainly and other carriers had an explosive growth delivering 2.3 billion in 2024 v. 0.6 billion in 2019.”  

And it observed that the volume growth by companies who are and were also the largest customers of FedEx, UPS, and the United States Postal Service (USPS) represent what the report called the most dramatic development that possesses a risk of further reducing the addressable market for FedEx, UPS, and the USPS.

Looking at 2024 U.S. domestic parcel volumes by market share, ShipMatrix found that total volume came in at 23.8 billion, which was paced by the USPS, at 7.2 billion packages, and Amazon Logistics, at 6.1 billion. UPS was essentially flat year-over-year, at 4.8 billion packages, and FedEx saw a marginal decrease, down to 3.4 billion packages. Rounding out the group were the “other carriers,” the report noted, with private fleets of Walmart and Target and also smaller carriers including OnTrac, Better Trucks, Jitsu, Veho, and GLS, among others, at 2.3 billion packages, marking a 44% annual gain.

On the revenue side, the report said that 2024 U.S. parcel market revenues posted a 4.1% annual increase, to $188 billion. Which was paced by UPS and FedEx, at $59.8 billion and $48.2 billion, respectively. Amazon Logistics came in at $34.7 billion and the USPS was at $32.5 billion, while the “Other Carriers” were at $13 billion, up 48% annually.

ShipMatrix President Satish Jindel told LM that the amount of collective market share of FedEx and UPS going back to 1998 has decreased from 90% to less than 50%, attributing that decline to losing market share to the aforementioned private fleets Amazon and Walmart, while adding that there are others like Staples and Target also using contractors and gig workers to deliver their products.

And he added that in looking to the future, FedEx and UPS are increasingly focused on growing their B2B, SMB, and healthcare businesses.

“They choose to ignore, either by intent or oversight, that they care to be a dominant player in B2C,” he said. “The B2C [market] is converting into direct delivery by shipper retailers who have finally realized the best way to do online fulfillment is from your local store—and that does not require the networks of FedEx and UPS.”

Looking ahead, the report noted that the U.S. parcel market volume is pegged to grow at a 4% CAGR (compound annual growth rate) over the next three years, from 23.8 billion in 2024 to 26.8 billion in 2027. But it added that comes with the caveat of the majority of that growth expected to be handled by private networks of Amazon, Walmart, and other retailers, resulting, in turn, of flat-to-negative growth for UPS, FedEx, and the USPS.