Rising Package Shipments A Sign of Hope

The global parcel market seems to be headed in the right direction, according to daily volume numbers since the end of 2009.

Gerard Hempstead, president of shipping concultancy Hempstead Consulting, says Federal Express has posted significant year-over-year numbers since December 2009. FedEx SmartPost average daily volume jumped 63%, while FedEx Ground average daily package volume rose 5%, and FedEx SmartPost average daily volume soared 46% as of March.

FedEx Ground average daily package volume increased 7% as of June, and FedEx SmartPost average daily volume improved 23%. For FedEx Ground’s first quarter ended Aug. 31, average daily package volume grew 7% while FedEx SmartPost average daily volume increased 9%.

“Every announcement from the U.S. Postal Service, UPS and Federal Express this year has been about positive package growth, both in domestic air and domestic ground,” Hempstead says. “It could be indicative that the recession ended in December.”

UPS showed improvement in UPS Ground shipments during the fourth quarter, Hempstead says. UPS’s air delivery business, although less important to UPS than to FedEx, also has been positive, he notes. “One might believe UPS is cannibalizing packages from the USPS, but package services at the USPS is up as well. All three domestic players have been on the plus side of package growth this year, so it’s true growth.”

Positive package numbers notwithstanding, Hempstead says this pattern may not be indicative of what’s going to happen going forward. “But I’m optimistic about the numbers for the next two quarters. The good news is that the decline in packages has abated and that the firms can stabilize their workforces.”