Owner Operators

Peak parcel demand to exceed capacity by 4.7 million daily shipments

Gearing up for peak parcel season ahead, ShipMatrix has estimated that across the U.S. alone, the daily demand for delivery will exceed the nation’s delivery network by approximately 4.7 million parcels per day.
Although 2020 provided an unprecedented 2020 peak delivery season, it is expected that delivery demand in the upcoming peak season will exceed even the record breaking numbers set the year before. The current differential predicted for the peak 2021 delivery season is relatively more narrow than the 7.3 million daliy gap that was identified in 2020.
ShipMatrix founder and CEO Satish Jindel said his company’s “exhaustive modeling exercise” was based on the expected peak capacity of the major service providers, such as FedEx Corp., (NYSE:FDX) UPS Inc., (NYSE:UPS), the U.S. Postal Service and DHL, as well as regional delivery providers and others. It is predicated on a seven-day delivery week, Jindel said in an email to FreightWaves.
UPS CEO Carol B Tomé said recently on an analyst call that their forecasted daily gap is around 5 million parcels. Jindel said Wednesday that he doesn’t know how Tomé came up with the number, but that it didn’t come from his company’s data.
Thanks to brick and mortar stores being reopened, the gap for 2021 is not expected to be as high as it was in 2020. Analysts expect in person shopping to increase as both vaccination numbers increase and Covid-19 cases steadily decrease. Many carriers have taken measures to improve infrastructure after the harsh lessons they learned in the midst of the 2020 peak season, with the demand being higher than ever. It is expected that shippers, retailers, and carriers have spent the last nine months preparing and adjusting their current operations to better meet the demand for this year’s peak season.
As the pandemic rages on and Covid-19 case numbers constantly wavering with the addition of many variants, notably the delta variant, it is quite possible that shoppers across the U.S. could again choose to abandon their in-store shopping experiences for a safer online one. Let’s not forget that bad weather across many parts of the U.S. will also play a large factor in the number of Americans that choose in person shopping over online, as well. Much of the impact will depend on the percentage of fully vaccinated Americans at the time that holiday shopping commences. Currently, about 53% of the U.S. population is fully vaccinated, according to public data.

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