Historically, brick-and-mortar retailers, e-commerce businesses,
and other small parcel shippers have had limited leverage in
negotiating small parcel rates in a supply market that behaved as a
duopoly. Current industry dynamics have shifted market power to
shippers, and the Ankura Performance Improvement Practice has been
successfully helping clients reduce costs by 15% to 20%. Shippers
should act quickly, as we estimate the window of opportunity may
close in 6-12 months.
Finally, Shippers Have the Upper Hand!
While growth has moderated slightly from the dramatic increases
seen during COVID, consumer expectations for fast, inexpensive
service continue to remain high.
Expansion of Amazon's capacity and services has
taken share from UPS and FedEx creating excess capacity in their
networks.
