LM    Topics     Logistics    3PL    Pitney Bowes

Pitney Bowes Parcel Shipping Index highlights ongoing strong impact of e-commerce

The Pitney Bowes Shipping Index, which was recently issued by Stamford, Ct.-based Pitney Bowes, a global technology services provider of commerce solutions powering billions of transactions, showed how despite various economic and pandemic-influenced market conditions, the United States parcel market remains on a more-than-solid growth path, even when compared to pre-pandemic predictions and estimates.

The Pitney Bowes Parcel Shipping Index measures parcel volume and spend for business-to-business, business-to-consumer, consumer-to-business and consumer consigned shipments with weight up to 31.5kg (70 pounds) across Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Norway, Sweden, the United Kingdom and the United States.

The index is replete with key data points for the United States parcel market, in 2022, including:

  • U.S. parcel volumes were down 2%, at 21.2 billion pieces, in 2022, compared to 2021’s 21.7 billion pieces, which topped pre-pandemic forecasts by 1.1 billion packages, with the firm forecasting U.S. parcel volume to come in at 28 billion by 2028, a 5% CAGR from 2023-2028;
  • 674 parcels were generated every second, coming in at 58 million per day;
  • an average of 162 parcels were shipped per household; and
  • carrier revenues—at $198 billion—saw a 6.5% annual increase over 2021’s $186 billion, with UPS at $73 billion (a 5.5% annual increase), FedEx at $65 billion (a 5% annual increase), USPS at $31 billion (which was flat), Amazon Logistics at $24 billion (which was flat), and “others” combined revenue at $4 billion, up 0.1%;

For market share by parcel volume, USPS was even at 32%, UPS was even at 24%, Amazon Logistics was up 1%, at 23%, FedEx was even at 19%, as were “others” at 2%. And by revenue, UPS and FedEx led the wat, at 37% and 37%, respectively, with each company posting a 4% annual gain. UPS was down 1%, to 16%, with Amazon Logistics up 1%, to 12%, and “others” flat at 2%.

In an interview, Vijay Ramachandran, Pitney Bowes, Vice President, GTM Enablement + Experience, explained that the 6.5% annual increase in carrier revenues, from 2021 to 2022, speaks to the fact that increased e-commerce activity is not going away. A lot of what is changing, he explained, has to with why people are shopping online.  

“It is not so much what drove online shopping before the pandemic,” he said. “The 6.5% increase is nominally higher than what we expected but only because we expected the capacity constraint situation to resolve itself slightly earlier than it did. The pricing reflects a prolonged challenge around capacity. It is sort of this domino effect in that capacity would continue to be challenged because e-commerce had staying power longer than 2020 to 2021 and stayed through 2022.”

From a volume perspective, he said the 21.2 billion parcels delivered in 2022 is a full year ahead of Pitney Bowes’ pre-pandemic expectations, which speaks to the “stickiness” of e-commerce adoption and creates what he called a “control of demand,” for parcel capacity, which a lot of carriers have.

Ramachandran observed that this higher demand for a certain set of well-known carriers implies that there is a nervousness, or hesitation, on the part of shippers to diversify beyond well-known carriers—and is subsequently what is driving the price difference.

“It is a lack of comfort, trust, and maybe even credibility from the plethora of new carriers that have emerged over the last two or three years,” he said. “That is why you are seeing the larger carriers drive a price premium. It is because it is the devil you know. And the challenge you are going to see with shippers this year is both the large carriers and public companies are not going to be in a position where they can backtrack on pricing. Are shippers going to tread water into diversification or are they going to stay and pay the higher rates that are demanded from the major carriers? It comes back to name recognition and trust.”

With e-commerce not reverting to the mean, as was expected, coupled with parcel volumes remaining higher than forecasted, means shippers need to go and make thoughtful and purposeful decisions regarding what carriers they are going to work with one-to-two years ahead. And, for technological or process reasons, he said many shippers have not been able to diversify as much as they would have liked.

Looking ahead, the index pegs annual parcel volumes to climb to 28 billion in 2028, which would represent nearly a doubling of 2019’s 15.4 billion tally. Ramachandran noted that this speaks to how the reasons why people buy goods online are fundamentally shifting.

“2019 and prior to that, the Internet was this endless aisle,” he said. “If I could not buy something in a store, I would buy it on the Internet. This gave rise to a lot of niche brands in very tight categories, like sox, for example. That goes back to the idea of this endless aisle. The pandemic taught us that necessities can be purchased online, whether it is furniture or groceries or other things. Anybody that built a business model on just being niche is finding that is not enough. Consumer sentiment has changed. They want to buy online; that is obvious. Before you saw niche products competing with stores and delivering very fast but now people are buying online because they want to buy online and not because they can’t find the item in the store. If they need it right away, they will go to the store, but that is a fallback.”   

Article Topics

Parcel Express
Parcel Shipping
Pitney Bowes
Pitney Bowes Parcel Shipping Index
   All topics

Pitney Bowes News & Resources

Parcel volume growth slowed in 2022, observes Pitney Bowes report
Pitney Bowes Parcel Shipping Index highlights ongoing strong impact of e-commerce
Pitney Bowes introduces new same-day delivery service
Pitney Bowes Parcel Shipping Index points to major parcel volume and revenue gains
Pitney Bowes Parcel Shipping Index highlights strong growth for global parcel volumes
Supply Chain Best Practices: Visibility to In-Transit Inventory
Retail supply chain to become more complex for this year’s Peak Season
More Pitney Bowes

Latest in Logistics

U.S. rail carload and intermodal volumes are up, for week ending September 16, reports AAR
Q&A: Cary Davis, American Association of Port Authorities President and CEO-elect
Estes’ $1.52 billion bid beats ODFL’s bankruptcy offer for Yellow terminals
FedEx reports mixed fiscal first quarter earnings, with Ground up 3%
Ryder announces the official entrance of its BrightDrop Zevo 600 electric vans
Success in Volatile Markets: How High-Tech Companies can Optimize Their S&OP Process
ATA August tonnage readings are mixed
More Logistics

About the Author

Jeff Berman's avatar
Jeff Berman
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review and is a contributor to Robotics 24/7. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis.
Follow Modern Materials Handling on FaceBook

Subscribe to Logistics Management Magazine

Subscribe today!
Not a subscriber? Sign up today!
Subscribe today. It's FREE.
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today.

September 2023 Logistics Management

September 6, 2023 · Logistics operations are facing a human capital crisis that poses a threat to both performance and competitiveness. In this year’s study, our authors explore how organizations can compete for talent in an increasingly limited talent pool; how organizations are competing in an increasingly dynamic business environment; and examine the technologies that shippers now need to use to stay ahead of the curve.

Latest Resources

Do More with the Same in Logistics and Distribution
Download this new white paper to learn best-practice strategies that can help your company do more with the same — optimizing your workforce to weather the current economic climate and pave a successful path forward.
Managing Global Complexity for the Long Term
Motor Freight Special Issue: Finding a way back to “normal”
More resources

Latest Resources

Driving ROI with Better Routing, Scheduling and Fleet Management
Driving ROI with Better Routing, Scheduling and Fleet Management
Improve efficiency and drive ROI with better vehicle routing, scheduling and fleet management solutions. Download our report to find out how.
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Get expert guidance and best practices to help you navigate the cross-border shipping process with ease. Download our free white paper today!

Warehouse/DC Automation & Technology: It’s “go time” for investment
Warehouse/DC Automation & Technology: It’s “go time” for investment
In our latest Special Digital Issue, Logistics Management has curated several feature stories that neatly encapsulate the rise of automated systems and...
Why accurate, real-time location data is a must for efficient operations
Why accurate, real-time location data is a must for efficient operations
Find out how next-generation workforce management apps use accurate, real-time location data to power successful operations in this webinar with Radar CEO...
Should you lease or buy your lift truck fleet?
Should you lease or buy your lift truck fleet?
Leasing critical equipment like lift trucks can offer flexibility, but some lease terms can be complex and costly if you’re not...