For the twelfth consecutive quarter, FedEx has increased the proportion of shipments handled by its FedEx Ground subsidiary over the same quarter the previous year. The continued rapid growth of FedEx Ground’s SmartPost service reflects the continuing increase in business-to-consumer shipments that FedEx transports for its customers.
The following chart illustrates the share of FedEx Ground shipments delivered by the Postal Service since 2009. The increase in the USPS share of deliveries reflects the faster market growth of FexEx SmartPost as compared to FedEx Ground’s delivery using other FedEx Ground or FedEx Home contractors.
The fast growth rate of FedEx SmartPost reflects the need of B-2-C online retailers for a low-cost delivery service that allows them to sell low-value and lightweight products at prices sufficiently attractive to consumers to choose an on-line purchase. As traditional brick and mortar merchants continue to increase the share of their sales from stores to the web, the USPS delivered a share of FedEx’s ground delivery parcels should continue to grow.
Similar data on United Parcel Service’s use of the Postal Service to deliver lightweight and low-value parcels is not publicly available. However, the Postal Service’s share of UPS deliveries is likely to be quite small as UPS has just begun serious marketing of its UPS SmartPost service.