In today's e-commerce landscape, delayed package deliveries can significantly impact customer satisfaction and brand reputation. The challenge of selecting reliable carriers to ensure timely deliveries has become increasingly complex for retailers and online platforms. Recent data from Convey provides valuable insights into current logistics market conditions.
Convey's March Logistics Report: Carrier Performance in the Pandemic Era
Convey, an Austin-based delivery experience management software provider, has released its March data report analyzing over 10 million packages shipped to more than 500,000 locations across North America. The report examines the ongoing impact of COVID-19 on retail deliveries and last-mile logistics, with particular focus on the market share and on-time performance (OTP) of major carriers including FedEx, UPS, USPS, and regional providers.
Key Finding 1: Overall Recovery to Pre-Pandemic Levels, FedEx Falls Behind
The report reveals that average on-time delivery rates across all carriers reached 82% in March 2021, slightly below the 85% recorded in March 2020 but generally consistent with pre-pandemic levels. However, significant disparities exist among carriers. FedEx's 75% on-time rate substantially trailed competitors, with UPS and USPS achieving 86% and 90% respectively. FedEx's economic service tier showed particularly poor performance, potentially related to ongoing service transitions.
Key Finding 2: Market Stabilization with FedEx and UPS Dominating
Market shares have remained stable for UPS and DHL since early 2021, while FedEx has gradually gained ground primarily at USPS's expense. March 2021 market shares were distributed as follows: FedEx (38%), UPS (26%), USPS (9%), DHL (11%), and regional carriers (16%). This consolidation suggests FedEx and UPS continue to dominate, though USPS's declining position may signal future market shifts.
Key Finding 3: FedEx Economy Transition Correlates with Performance Decline
FedEx's March rebranding of SmartPost to FedEx Economy accompanied a strategic shift to internalize last-mile deliveries previously handled by USPS. Analysis of 14 million SmartPost/Economy packages from January 2020 through March 2021 shows USPS's involvement dropped from 69% to just 3%, with FedEx now handling 97% of these deliveries through its Ground network.
This transition has coincided with a dramatic on-time rate decline from 86% in March 2020 to 66% in March 2021. Data suggests FedEx is struggling to meet its promised delivery dates while simultaneously expanding capacity to accommodate increased volume.
Strategic Implications for Retailers
Carson Krieg, Convey's co-founder and Head of Strategic Partnerships, recommends retailers closely monitor carrier performance data to optimize shipping strategies. "During peak seasons, shifting volume from underperforming carriers to more reliable alternatives can significantly improve delivery outcomes," he noted.
The report highlights several operational challenges potentially contributing to FedEx's performance issues:
- Capacity constraints: Surging e-commerce demand during the pandemic has strained delivery networks
- Network integration: Incorporating SmartPost volume into Ground operations requires significant optimization
- Labor shortages: Industry-wide staffing challenges impact operational efficiency
- Aggressive delivery promises: Overly ambitious estimated delivery dates may be unrealistic given current conditions
Optimizing Delivery Performance
Retailers can implement several strategies to enhance delivery reliability:
- Leverage performance data to inform carrier selection decisions
- Diversify carrier portfolios to mitigate risk
- Provide transparent, accurate delivery information to customers
- Proactively communicate about potential delays
- Continuously monitor and adjust logistics strategies
In today's competitive e-commerce environment, delivery experience has become a critical differentiator. By leveraging data analytics and implementing strategic carrier management approaches, retailers can strengthen customer satisfaction and brand loyalty despite ongoing logistics challenges.