U.S. Postal Service dominates domestic air cargo

By Staff -- Logistics Management, 11/1/1999

Measured by the number of domestic air shipments handled, the U.S. Postal Service (USPS) dominates the skies. According to the Colography Group, an Atlanta-based research firm that specializes in the airfreight and air-express industries, the postal service accounted for nearly 45 percent of all domestic aircargo shipments in 1998, making USPS the leader in the $31 billion market.

According to the Colography Group's annual analysis of the domestic and U.S. air-export markets, the USPS moved 1.3 billion Express Mail and Priority Mail (two- and three-day service) shipments during 1998, representing 44.7 percent of the 2.8 billion domestic air shipments made during the year. Integrated carrier FedEx came in second, followed by United Parcel Service (UPS) and Airborne Express. (See chart.)

"The results reflect Priority Mail's growing influence in the marketplace," says Ted Scherck, president of the Colography Group. "The Postal Service has created a unique product ideally suited to the non-overnight delivery needs of many businesses. As USPS enhances Priority Mail's [service] features and improves delivery reliability, we expect strong growth to continue."

Overall, domestic air shipments in 1998 increased by 7.6 percent over 1997 levels, the report said. Packages moving in "deferred" service accounted for 60 percent of those shipments. Overnight letters and envelopes accounted for 27 percent of all shipments and revenue in 1998. Overnight heavy freight made up the rest of the domestic market.

The air-export market in 1998 totaled 85.6 million shipments, slightly above the 84.2 million moved in 1997. Air-export revenue totaled $8 billion, of which 36.5 percent was generated by packages and documents weighing 70 pounds or less. FedEx handled 35.5 percent of all air-export shipments in 1998. DHL was second, handling 12 percent of outbound air shipments last year. (DHL is the leading air-express carrier when all international shipping is considered. The company says it handles about 40 percent of all international express traffic.)

Average air shipment weight fell slightly, following a trend set over the last several years. The Colography Group report said that the weight of the average domestic deferred shipment hit a four-year high of 7.9 pounds in mid-year but had fallen to 7.3 pounds by year's end. The weight of the average overnight shipment fell from 7.4 pounds in 1995 to 6.9 pounds at the end of 1998.