In Convey Inc.’s latest analysis of last-mile delivery services and an executive survey on the topic, the company found that despite FedEx’s dominant market share position, the company had a hard time in April in regard to performance. But, overall, on-time performance has improved in the market.
Convey’s proprietary April performance and market share data for FedEx, UPS, the United States Postal Service and regional carriers showed that UPS and USPS were stable month-over-month, “while FedEX continues to struggle.”
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“On-time performance has stabilized and has returned to pre-pandemic performance levels,” Convey said, adding that its carrier performance analysis is derived from tens of millions of packages shipped from over 500,000 locations in North America during April.
Convey said the analysis showed that 82 percent of parcel shipments “were delivered on time in April 2021, up from 77 percent in April 2020. This is likely due to the fact that volume-related network stress has decreased (no panic buying; brick-and-mortar reopening). In addition, carriers have caught up to new processes and labor impacts are less common,” the company said in its report.
Still, Convey found that on-time performance “hasn’t quite caught up to April 2019 levels (89 percent) due to FedEx performance issues.”
“FedEx performed significantly lower than other carriers in April 2021 (71 percent on-time performance compared to 88 percent for UPS and 90 percent for USPS) with its cheapest service levels hit hardest,” the authors of the report said. “FedEx recently announced significant open positions for its ground service, so we will continue to monitor and see if these new hires positively impact their on-time performance. ”
Convey said April market share stabilized “with FedEx and UPS dominant … for now.” The company said for the past three months, UPS, FedEx, USPS and DHL have all “held steady” in Convey’s network. For April, market share for the carriers stood at FedEx with 36 percent and UPS at 28 percent while USPS had 9 percent and DHL came in at 10 percent. Regional carriers in the Convey network had 16 percent market share in April.
Regarding the survey of business executives, Convey said retailers have accelerated last-mile investment, and have added new delivery partners. The company’s poll found that 81 percent of retailers “are planning to increase investment in more complex last-mile initiatives over the next 12 months” while 57 percent “of retailers have added at least one delivery partner or carrier in the past year.”
The top reason cited was to “meet customer demand for increased delivery speed” with 70 percent, which was followed by “balance delivery costs with customer expectations” at 49 percent and “offer innovative delivery options to remain competitive” with 35 percent.