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Regional parcel shippers aggressively courted by UPS and FedEx
National carriers, UPS Inc. and FedEx Corp. are reportedly taking market share from regional parcel delivery rivals by offering price discounts. While this is not new, the aggressiveness of the national carriers is said to be different from the past. ShipMatrix President, Satish Jindel, believes that overcapacity rules the parcel market. This is evident in the fact that the US Postal Service only processes 55% of its daily capacity of 60 million parcels. Since the pandemic, the market has become saturated with dozens of parcel carriers of different sizes, raising consumer familiarity concerns as the majority of the new carriers are unknown to them. As shippers return more packages to national carriers, they are eligible for discounts that they may have forfeited when they fled, and this increases the incentive to switch carriers. A Moody's report recently downgraded the debt ratings of OnTrac, the largest regional carrier in the US, because of excess capacity, weak demand, and high financial leverage.
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