In 2025, Amazon surpassed the U.S. Postal Service to become the largest domestic parcel carrier in the United States. This shift marked a significant change in the market dynamics, as Amazon took on a substantial amount of last-mile delivery work that was previously handled by UPS. According to data released by ShipMatrix Inc., Amazon handled 6.7 billion parcels last year, a 9.8% increase from the previous year. In contrast, the U.S. Postal Service experienced an 8.3% decline, delivering 6.6 billion pieces. UPS also saw an 8.3% decrease in volume, with 4.4 billion deliveries, while FedEx delivered 3.6 billion parcels, a 5.9% increase from the previous year.
Amazon’s parcel growth was not solely driven by its own online orders but also by new contracts from third-party sellers who do not operate on Amazon’s platform. The overall industry volume remained relatively flat at 23.9 billion packages, with alternative carriers experiencing a 13% growth to 2.6 billion units. This trend reflects a broader market shift towards logistics services from online retailers such as Walmart and Target, as well as low-cost start-ups and independent carriers like UniUni, Veho, Gofo, Jitsu, SpeedX, OnTrac, and Better Trucks.
UPS and FedEx have made a strategic decision to retreat from commodity last-mile delivery services and focus on B2B logistics and high-value e-commerce shipments. This shift allows them to command a premium for complex services and consolidate ground shipping centers to optimize revenue per parcel. However, targeting a smaller base of B2C parcels and B2B business presents a challenge for both carriers, as B2C deliveries account for 75% of the parcel delivery market, while B2B’s market share has shrunk to 25%.
As the landscape of parcel delivery continues to evolve, with shorter delivery distances and changing consumer preferences, carriers like FedEx are adapting their strategies. By focusing on B2C parcels weighing over 50 pounds and traveling more than 300 miles, FedEx aims to capture a niche market segment. However, ShipMatrix data reveals that only a small percentage of B2C parcels fall into this category, highlighting the need for carriers to continuously refine their service offerings.
The U.S. parcel market generated $196 billion in revenue in 2025, a 4.1% increase from the previous year. The Big Three carriers – UPS, FedEx, and Amazon Logistics – led the market in terms of revenue, with UPS topping the list at $58.3 billion, followed by FedEx at $57.1 billion. Amazon Logistics and the USPS generated $38.5 billion and $32.5 billion in revenue, respectively. Smaller carriers competed for the remaining $15 billion in sector revenue, with a 15.4% year-over-year growth.
The continued growth of online shopping is evident in the parcel delivery market, with the average adult receiving 1.84 parcels per week and carriers moving 91 million pieces each weekday. ShipMatrix forecasts a 3.9% compound annual growth rate in the parcel market, estimating 26.8 billion pieces by 2028. This growth is attributed to the shift towards online shopping, enhanced technology, and evolving consumer behaviors.
In conclusion, the parcel delivery landscape is undergoing significant changes, with Amazon emerging as the largest domestic parcel carrier in the U.S. This shift has implications for traditional carriers like UPS and FedEx, who are adapting their strategies to focus on high-value e-commerce shipments and optimize revenue per parcel. As the market continues to evolve, carriers must stay agile and responsive to changing consumer preferences and industry trends.
