Rethinking Parcel Strategy in the Amazon Era

Amazon now handles more U.S. parcels than USPS. In 2025, Amazon carried about 6.7 billion parcels while USPS handled about 6.6 billion. UPS and FedEx moved fewer parcels by volume while remaining leaders in parcel revenue and complex services. Regional and alternative parcel carriers grew volumes at double digit rates.

This is not just a change in rankings. It changes what customers expect and how your parcel decisions affect cost and service.

Your parcel strategy now must reconcile rising expectations with a more dynamic carrier landscape.

How Customer Expectations Have Shifted

Customers increasingly expect:

• Same day or next day options in more markets
• Consistent delivery times across regions
• Factual estimated delivery date at order origination
• Proactive tracking and clear proof of delivery

They bring those expectations to every brand, not just Amazon. A three to five business day promise feels slow and uncertain in many categories, especially with limited visibility.

At the same time, carriers are tuning their networks.

• UPS is reducing Amazon volume and focusing on segments that better fit its network, pricing and yield goals.
• FedEx is restructuring Ground and Express, changing how volume flows through some regions.
• USPS is pursuing rate increases, temporary surcharges and network changes.
• Alternative carriers are leveraging surcharges and fees resembling the big two.

These moves help carriers manage their own performance and investment. For shippers, they introduce new variables into planning. These shifts show up every month in the parcel market.

Why This is a Network and Decision Issue

Amazon’s rise reflects a different approach to parcel, not only larger scale. Two elements matter to every shipper.

1. Shorter average shipping distances

Amazon and other large retailers have moved inventory closer to demand, using more fulfillment locations so parcels travel fewer zones. Shorter distances support faster delivery, reduce exposure to some surcharges and give more flexibility when conditions change.

Many shippers still rely on fewer nodes serving broad territories. That can be efficient for certain products, but it increases the share of parcels that must travel long distances. When market conditions or carrier rules change, these networks are harder to adjust.

2. Data driven parcel decisions

Advanced shippers use detailed parcel network, tracking and order data to decide:

• Which facility should ship each order
• Which service level to use
• What promise to surface to the customer

They view parcel cost and service in terms of weight, distance, product mix and customer segment, not only carrier and contract.

By contrast, many organizations mainly track total parcel spend and carrier scorecards. That is useful, but not enough for questions like:

• Which SKUs are most sensitive to parcel cost?
• Where are we overusing fast services because of network design?
• Which customers feel the most risk when parcel performance slips?
• What carriers are providing the most reliable service?

Treating parcel as a network and decision issue opens more options than treating it only as a carrier issue.

What Leading Parcel Teams Are Doing

In our view, high performing parcel shipping teams tend to do three things.

1. Get a clear view of parcel performance

They move from aggregate views to specific patterns. Using parcel analytics, they look at:

• Origin and destination by zone and region
• Transit performance against expected delivery on key lanes
• Parcel cost and sensitivity by SKU and customer segment

By combining shipment, cost and performance data into one view, teams can quickly see:

• Where longer distances are driving use of faster services
• Which products or promotions create long zone shipping spikes
• Where experience falls short of what the network could deliver

This clarity is the starting point. Without it, network changes and contract optimization work are guesswork.

2. Change the parcel network where it moves numbers

With that view, they look for a small set of changes that shift measurable outcomes.

Examples:

• Adding a stocking point for selected SKUs so a significant share of orders move to lower zones
• Changing order cutoff times where data shows earlier or later cutoffs would reduce idle time and missed expectations
• Adding regional carriers on lanes where they fit density and service targets, while national carriers continue to support other profiles

Each move is judged on:

• Parcel cost per order
• On time performance for stated delivery windows
• Margin at SKU and customer level after parcel cost

The goal is not complexity. The goal is targeted moves with clear impact.

3. Make parcel part of regular management

Leading teams also treat parcel as part of a standing operating rhythm. On a set cadence, they:

• Review parcel performance and cost patterns
• Note how recent carrier and market changes show up in their own data
• Decide which levers to adjust next, whether contracts, network, packaging or promises

Parcel strategy becomes an ongoing practice, not a once a year event tied only to renewals.

Why is Now the Time to Rethink?

Amazon’s position at the top of U.S. parcel volume, along with the continued growth of regional and alternative carriers, confirm that the parcel market is in a structural shift. Not to mention, Amazon Shipping’s entry into the parcel market and the early success being realized. Carrier networks, pricing and rules will continue to evolve. Customer expectations will not move backward.

You do not need a full rebuild to respond, but you do need a different posture. That posture includes:

• Treating parcel performance as a product of both carriers and network design
• Using parcel analytics to find a few high leverage changes
• Embedding parcel into a regular management rhythm

In the new parcel era, the question is not whether you match every feature of the largest networks. The question is whether your parcel strategy keeps moving toward the expectations your customers already have while protecting the cost and margin your business needs.