Pricing pressure on U.S. parcel shipping providers will increase disruption among carrier services, which is good news for shippers, according to an annual report from shipping and mailing service provider Pitney Bowes Inc.
That trend comes as carriers are increasingly offering competitive pricing in a bid to capture a larger market share, leading to lower revenue per parcel. The cause of that pricing pressure is the rapid growth of alternative carriers, as well as USPS’ new low-cost shipping option, Ground Advantage, the firm said in its “Pitney Bowes Parcel Shipping Index.”
The numbers bear this out, as U.S. parcel volume in 2024 saw significant growth, reaching 22.4 billion shipments, a 3.4% increase over the prior year. However, revenue grew more slowly, delivering just a 2.7% increase.
Digging into the details of those aggregate volume totals, smaller carriers experienced double-digit volume growth of 23% from 0.6 billion packages to 0.8 billion, while parcel market heavyweights FedEx, UPS and USPS lagged. Another fast grower was Amazon Logistics, which handled 6.3 billion parcels in 2024, claiming the number two spot for market share by volume, just behind USPS’ 6.9 billion parcels. Amazon is projected to overtake USPS by 2028.
Tariffs could also cause disruption for the incumbents, producing new opportunities for smaller carriers. The newly imposed tariffs are expected to affect carriers’ cross-border shipping costs and disrupt supply chains with longer delivery times for international shipments. New, final-mile and regionally specialized carriers could capitalize on the growing demand for localized, cost-effective shipping solutions in markets where the larger international carriers may struggle to offer affordable services, Pitney Bowes said.
“Since Pitney Bowes began tracking shipments a decade ago, the parcel market has been dominated by FedEx, UPS and USPS. We are witnessing a turning of the tide, evidenced by the nearly 40% volume growth in the five-year CAGR of ‘Other’ carriers. This disruption presents a unique opportunity for businesses to take advantage of competitive pricing,” Shemin Nurmohamed, EVP & President of Sending Technology Solutions at Pitney Bowes, said in a release.
“With carriers facing increased competition, evolving service offerings and potential tariff impacts, it’s essential for businesses to have flexibility in shipping providers. Leveraging shipping technology that grants access to multiple carriers – and comes with pre-negotiated discounted rates – provides the flexibility to adapt to shifting dynamics in the market,” Nurmohamed said.
