Amazon is Now the Top Delivery Business in the U.S., and its Lead is Set to Expand - Modern Distribution Management

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Amazon is Now the Top Delivery Business in the U.S., and its Lead is Set to Expand

While the company didn't celebrate it with fanfare, it’s still a significant milestone for Amazon's vast logistics network.
NAMPA, IDAHO - APRIL 17, 2021: Amazon trailers being loaded before heading on the road as freight

Amazon now stands as the biggest parcel delivery business in the United States, and the volume back between it and UPS and FedEx is only set to expand, according to analysis by the Wall Street Journal.

The WSJ reported Nov. 27 that Amazon had already surpassed 4.8 billion parcel deliveries in the U.S. before Thanksgiving and that internal company projections estimate the eCommerce giant will end up with about 5.9 billion deliveries by the end of 2023. Amazon shipped approximately 5.2 billion packages in 2022.

Meanwhile, UPS has stated that its 2023 domestic delivery volume is unlikely to top last year’s 5.3 billion, and that it had delivered about 3.4 billion packages domestically in the first nine months of the year.

In its fiscal 2023 which ended May 31, FedEx’s domestic delivery volume was just over 3 billion.

Amazon’s figure only encompasses packages that the company shipped end-to-end, while UPS and FedEx’s include packages delivered to customers via the U.S. Postal Service.

The USPS remains the largest domestic parcel service by volume — providing delivery for Amazon, UPS and FedEx.

Amazon was once a key customer for both UPS and FedEx. The latter cut ties with Amazon in the summer of 2019, while UPS and Amazon have pulled back from each other’s relationship over the past several years. Deliveries for Amazon currently account for about 11% of UPS’ total domestic revenue.

Podcast: Amazon Business is Just Getting Started (Nov. 8)

However, taking the U.S. delivery crown wasn’t seen as major cause for celebration by Amazon, according to the WSJ. The news outlet cited one unnamed company executive noting that the milestone was merely marked with high-fives.

“There’s not a lot of perceived value in chest-thumping on being the biggest,” a former senior Amazon logistics executive told the WSJ.

During 2022 and early 2023, Amazon overhauled and optimized its logistics network in a move that created eight self-sufficient shipping regions, moving away from its previous nationwide delivery model that sent products across the country. Accompanied with major cost-cutting measures that included laying off about 27,000 employees, Amazon reportedly was able to cut delivery times, improve inventory management and improve search results for customers.

In late June of this year, Amazon announced Amazon Hub Delivery as a new program that will pay small businesses to deliver packages as part of the company’s last-mile delivery service.

Amazon Business Survey: Most Procurement Leaders Expect Budgets to Increase in 2024 (Nov. 14)

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