Amazon.com has achieved a significant milestone by becoming the largest delivery business in the U.S., outpacing both UPS and FedEx in parcel volumes. In 2022, Amazon delivered more packages to U.S. homes than UPS, surpassing FedEx in 2020. However, the U.S. Postal Service remains the biggest parcel service by volume, handling millions of packages for all three companies.
Amazon’s dominance is evident in its projected delivery of around 5.9 billion packages by the end of the year 2023, compared to 5.2 billion in the previous year. Notably, Amazon’s figures include packages shipped entirely by the company, while UPS and FedEx include those handed off to the postal service for final delivery.
On the other hand, UPS has said that its domestic volume this year is unlikely to exceed last year’s 5.3 billion, which includes packages delivered to customers through the postal service. In the first nine months of this year, UPS handled around 3.4 billion parcels domestically. FedEx’s domestic Express and Ground parcel volume reached around 3.05 billion for the fiscal year ended May 31, 2023.
The rise of Amazon as a delivery giant was initially met with skepticism, but its exponential growth and strategic shifts at UPS and FedEx have reshaped the industry. Amazon’s share of deliveries has increased, contributing to about 11% of UPS’s revenue.
In 2018, Amazon launched a program where entrepreneurs could start their own franchise delivering Amazon packages for as low as USD 10,000. As a result, the Amazon program now has around 200,000 drivers in the U.S., helping the company rapidly accelerate the number of packages it is able to deliver each day.
Amazon has moved to regionalize its logistics network to reduce how far packages travel across the U.S. in an effort to get products to customers faster and improve profitability. “These delivery speed improvements have been a key driver of growth and are resulting in increased purchase frequency by our Prime members,” said Amazon CFO Brian Olsavsky.
In addition to its U.S. success, Amazon has expanded its global reach through initiatives like the Global Seller Program in India. The program, launched in 2018, allows entrepreneurs to start their own franchise for delivering Amazon packages. With around 200,000 drivers in the U.S., this program has played a pivotal role in Amazon’s ability to rapidly increase daily package deliveries.
While Amazon has prioritized regionalizing its logistics network for faster and more profitable deliveries, it still faces challenges in replicating the global coverage of UPS and FedEx. The company continues to collaborate with other delivery partners and carriers to handle additional capacity.
As Amazon achieves this milestone, it remains focused on delivering growth and enhancing its delivery capabilities, acknowledging that being the biggest comes with responsibilities beyond mere celebration.