Major Parcel Carriers Perform Well During Peak

UPS van in snow holiday peak season feature

The three major parcel carriers had a decent peak holiday season in terms of on-time performance, seeing service levels comparable to 2019, not a huge surprise as volumes were lighter even though holiday sales increased, as many shoppers returned to stores, and networks have expanded.

Based on data from ShipMatrix, which tracks millions of parcel shipments, UPS delivered packages on time at a rate of 97.5% between Thanksgiving and Christmas Eve, while FedEx’s on-time rate was 95.2% and for the U.S. Postal Service it was 94.3%.

The 2022 figures for the major parcel carriers compare favorably to their on-time performance during the 2019 peak, prior to the pandemic, when UPS also posted a 97.5% rating, while the USPS was at 95.6% and FedEx at 94.6%.

It also represented a significant improvement for FedEx from 2021, when its on-time performance was at 88.2% during the period, according to ShipMatrix data. Last year, UPS’s rating was 96.9% and USPS was at 96.5%.

FedEx’s rating was lower last year even though many Ground contractors complained of investing in new vehicles and hiring more drivers than needed when actual peak volume fell short of the company’s forecast. This was a main complaint of a group of disgruntled contractors led by Spencer Patton. The Association of Logistics Contractors (TALP) made some noise for a few months before disbanding after Patton was sued by FedEx and forced out of the network.

While a major mid-December snowstorm that gripped much of the country resulted in more than 10 million packages being delayed, this was not included in ShipMatrix’s 2022 figures. Satish Jindel, the company’s founder and president, said this was per an industry practice of excluding things outside the carriers’ control, such as wrong addresses or businesses being closed.

“One of the main reasons for the major parcel carriers doing better in 2022 was their creation of expanded capacity over the last two years, plus volume not increasing,” Jindel said. “Also, as often has been stated, more consumers were shopping at stores, inflation was a factor and there was more spending on services instead of goods.”

FedEx reported a 9% decline in Ground volume during the second quarter, covering September to November, and warned contractors in advance it would be lighter. UPS reports on its fiscal fourth quarter, including package volumes, at the end of this month.