NEWS & BLOG
Views: 8 Author: Site Editor Publish Time: 2022-12-23 Origin: Site
Big U.S. retailers have had a pretty good season this year, but Amazon has struggled. Due to the surge in orders, Amazon has to hand over about 1 million packages to UPS and USPS every day to meet the delivery needs of users.
According to data submitted by the consulting firm ShipMatrix, the three major express delivery companies in the United States - FedEx, UPS and USPS - have all increased their on-time delivery rates in the peak season of 2021. Among them, the on-time delivery rate of UPS is 96.1%, USPS is 95.5%, and FedEx is 95.3%.
Between Nov. 1-23 this year, the day before Thanksgiving, the three companies delivered an average of 85 million packages a day. UPS has an on-time delivery rate of 97 percent, FedEx 96.3 percent and USPS 96.2 percent. From Nov. 24-30, when the average daily package volume rose to 90 million, UPS delivered on-time rates of 96.6 percent, USPS 95.8 percent and FedEx 95.3 percent.
Satish Jindel, president of ShipMatrix, pointed out: "This year, the logistics industry collectively fell back to pre-pandemic levels as capacity exceeded demand. Amazon's annoying two-day delivery service is facing severe challenges. In order to improve delivery speed, the company had to move some packages Give it to UPS."
Previously, Amazon made a clear description of the difficulties it faced. Due to excess capacity, it had to reduce storage space to control costs. In the meantime, it has diverted many packages to UPS or USPS.
Satish Jindel believes that Amazon's middle-mile network has huge challenges. The problem stems from the large number of service options offered by the company, which increase variability and complexity. And, the ever-increasing volume of packages further exacerbates these problems.
Dean Maciuba, managing partner at Crossroads Parcel Consulting, isn't surprised by Amazon's struggles. "Amazon had difficulties before Christmas, and those difficulties have been going on for six months," he noted.
Amazon has struggled primarily in mid-sized markets like Buffalo or Spokane, where the company takes three to five days to deliver packages instead of two. Because in these markets, Amazon does not have a distribution center.
There has been no significant increase in U.S. package volumes this holiday season. Merchants' revenue at the peak of Cyber Week is only about 4% higher than in 2021, suggesting that package volumes may actually have contracted.
Amazon has expanded wildly during the pandemic, nearly doubling its capacity, and now the company is focused on cutting expenses. Amazon has closed many of its warehouses this year in response to slowing demand, which may also be the main reason for its recent package delivery problems. Also, the ongoing loss of labor is a major concern for Amazon.
Although in the next few months, the pressure of Amazon logistics network congestion will be further reduced. However, the retail giant's sales forecast for the early months of 2023 is quite pessimistic. The National Retail Federation forecast that U.S. imports would fall 7.2% in December from a year earlier, followed by an 8.8% drop in January, 20.9% in February and 18.6% in March.
It is worth noting that eBay, another large retailer in the United States, also seems to be facing logistics congestion. Last week, eBay notified sellers that there was a high risk of delays for packages delivered during the Christmas period (November 23 to December 2).