– Shift to cheaper options: Customers are increasingly choosing cheaper (slower) options like Ground over faster (more expensive) options like Air. This caused a 2.6% decline in average revenue per US domestic package, though the average daily package volume increased by 0.7%.
– Rising use of Sure Post: More ecommerce merchants are opting for the Sure Post service, UPS’s cheapest option, where the last mile is delivered by USPS.
– Recovery from union strike threat: UPS is still recovering from a 10% volume loss due to last year’s union strike threat disruption (In July 2023, they narrowly avoided what would have been one of the largest strikes in U.S. history). They anticipate winning back some large volume customers as these customers’ contracts with competitors end.
About the Author
Jagath Narayan is the CEO and co-founder of Ordoro, the #1 ecommerce platform for retailers growing from 10 to 10,000 orders/day. Follow him on LinkedIn to learn more about entrepreneurship and ecommerce.
