ShipMatrix data highlights very strong parcel on-time performance rates

December began with very strong on-time delivery for online orders, according to recently-issued data by ShipMatrix, a subsidiary of Pittsburgh-based SJ Consulting.

For Cyber Week, which ShipMatrix defines as the week of December 1-7‑and a period in which more than 100 million parcels per day are handled, with more than 80% of these parcels being holiday gifts and delivered to residences—the firm reported very strong performance results for FedEx, UPS, and the United States Postal Service (USPS).

Combined on-time performance (OTP) for all domestic parcel services for the three carriers using end-of-day delivery, for express and an extra day for ground, hit high levels, respectively, with FedEx at 98.7%, UPS at 98.9%, and the USPS at 98.7%, reported ShipMatrix. The firm noted that with more than 100 million parcels shipped per day, even a 99% OTP results in 1 million parcels being delayed, with anecdotal reports of late deliveries not implying carriers are facing delivery challenges.  

What’s more, the firm explained this year’s data comes with a caveat, when compared to previous years, in that 30 million parcels per day are expected to be delivered by non-FedEx, -UPS, and USPS carriers, including Amazon online orders mainly delivered by contracted drivers, retailers like Walmart fulfilling more online orders from local stores, as well as Uber Eats, Doordash, and other gig workers making same-day and next-day deliveries.

ShipMatrix observed that the aforementioned high on-time performance levels are likely to remain intact over the balance of the holiday season, observing that market capacity is at 120 million parcels per day and Peak Season demand is estimated to be a at 106 million per day, well ahead of 2023’s 82 million parcels per day, noting that, “the excess capacity should ensure high level of timely delivery for the rest of the season.

And it added that orders placed after December 18 will be more expensive and also “carry a risk of not being delivered in time,” as was the case over the Christmas week in 2013, which was severely impacted by harsh winter weather conditions.

In an interview with LM, ShipMatrix President Satish Jindel said that efforts by carriers in running on-time performance and doing it correctly is five times more of a larger task than it was even two or three years ago—and almost double what it was last year—due to there being a whole host of complex rules for what the commit and transit time is by things like lanes, distance, and days in transit, for FedEx, UPS, and the USPS.

“Express services are measured for delivery by the end of the day,” he said. “So, if we had Express package coming to your home and the commit time may have been 3 P.M.,” he said. “If it got delivered at 3:30 P.M., I considered it as on time, because you may not know it was committed for 3 P.M. if you pick it up at the end of the day. It is the same thing for ground. You are ordering these things for Christmas; whether you get it on December 5 or December 6, does it make a difference? No, of course not and carriers can add one extra day to the regular commit time to provide that because otherwise it becomes relevant that I do that. Most people wouldn't otherwise think of it. As I get into the final week of December, I will not be worrying adding that extra day, because then every day becomes critical, whether you get it on the 22^nd, 23^rd, or 24^th, now you'll start getting nervous. So, I will make sure I'm recognizing the relevance of this information.”

With providers outside of FedEx, UPS, and the USPS increasing their carrying capacity, Jindel said it negatively impacts these legacy carriers.

As an example, he cited Walmart and the more it does online ordering fulfillment from one of its local stores for same-day or next-day delivery, for goods ordered through Walmart, it hurts a larger legacy carrier like FedEx, as the orders are being delivered by a carrier like Doordash or Uber Eats.

“[Legacy carriers] lose that volume and that revenue, and they now have a competitor that is a shipper, just like how Amazon has become a competitor,” he said. And he added there are likely to be increased delivery presences and also future competition from retailers like Costco and Walmart.