Imagine eagerly awaiting an online purchase, only to face repeated delivery delays. This frustrating experience has become increasingly common as the logistics industry struggles to adapt to pandemic-induced disruptions. March 2021 data reveals how major carriers are performing in this new normal, with significant variations in on-time delivery rates and market share.
Key Insight: While overall on-time performance has improved to 82% - the highest since the pandemic began - substantial gaps exist between carriers. FedEx trails significantly with just 75% on-time deliveries, compared to UPS (86%) and USPS (90%).
Market Share: Stability With Undercurrents
The carrier market remains relatively stable but competitive:
- FedEx: 38%
- UPS: 26%
- USPS: 9%
- DHL: 11%
- Regional carriers: 16%
While FedEx continues to gain ground, USPS has seen its market share decline since peaking in December 2020.
The FedEx SmartPost Transformation
FedEx's rebranding of its SmartPost service to FedEx Economy represents a strategic shift, moving final-mile delivery from USPS to its own Ground network. Analysis of nearly 14 million packages shows:
- USPS handled just 3% of final deliveries in March 2021, down from 69% in May 2020
- On-time performance dropped to 66% from 86% in March 2020
This decline appears driven by network capacity challenges as FedEx absorbs more volume into its Ground network while promising faster delivery estimates it struggles to meet.
Strategic Implications for Retailers
Supply chain leaders can optimize carrier selection by:
- Diversifying carrier portfolios
- Continuously monitoring performance metrics
- Maintaining transparent communication with carriers
- Enhancing last-mile delivery options
- Providing customers with real-time tracking
Industry Outlook
The logistics sector continues to face multiple challenges:
- On-time performance as competitive differentiator: Carriers must optimize operations to maintain customer trust.
- Data-driven decision making: Analytics tools are essential for monitoring carrier performance.
- Operational flexibility: The ability to adapt quickly to market changes remains crucial.
- Technology adoption: Automation, AI and blockchain are transforming logistics operations.
Looking ahead, the industry must navigate labor shortages, rising transportation costs, and sustainability pressures while leveraging technological advancements to improve efficiency and customer experience.