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Dive Brief:

Other delivery options see gains in 2024

U.S. parcel market share by volume since 2019

Dive Insight:

Delivery options outside the four dominant carriers have grown in popularity since the COVID-19 pandemic squeezed capacity and opened the door for shippers to explore other providers.

Top retailers are opting to build in-house delivery networks that lean on order fulfillment from their robust roster of stores. For example, Walmart can now reach 93% of U.S. households with same-day delivery after expanding coverage with its Spark driver platform. Target leans on its Shipt subsidiary for delivery from its stores and sortation centers.

The continued growth of top retailers' internal delivery capabilities risks "further reducing the addressable market for FedEx, UPS and the U.S. Postal Service," per ShipMatrix.

For shippers without the level of resources of Target or Walmart, there's an array of smaller parcel carriers to choose from — such as OnTrac, Veho and Better Trucks — that have expanded their coverage areas in recent years.

The growth of these delivery providers has been enabled in part by shippers seeking ways to limit the increasing rates and fees of larger carriers . Stitch Fix, Lulu’s Fashion Lounge Holdings and Lovesac all announced last year they added new delivery options to save on shipping costs.

In the face of heightened competition, FedEx and UPS have offered up aggressive discounts for customers and pursued volume from more lucrative industries like healthcare . The Postal Service has secured more direct contracts from shippers for its newer product offerings like Ground Advantage.

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