FedEx and UPS are fighting for business, especially targeting smaller customers in the face of a challenging holiday season, reports Wall Street Journal.
The issue at hand is that the peak shipping period from Black Friday to December 31 has been shortened by five days this year due to a later Thanksgiving. Experts expect overall holiday season package volume to continue to decline from its pandemic peak in 2021.
To combat the trend, both carriers are offering discounts to smaller customers that were previously reserved for bulk carriers.
Robert Persuit of shipping consulting firm ShipMatrix told the WSJ that customers with less than $500,000 in annual shipping expenses are now being considered for discounts, including breaks on fuel charges. “No customer is too small to be considered for a discount,” he said.
Related: UPS replaces FedEx as the primary air cargo provider for the USPS
The competition for shipping dollars extends beyond just FedEx and UPS. The US Postal Service has gained market share in ground parcels, while Amazon now delivers more than two-thirds of its packages. Walmart has also created its own same-day delivery service.
In recent years, FedEx and UPS have laid off tens of thousands of workers and closed dozens of facilities, but despite the challenges, both FedEx and UPS report some success with their pricing strategies. They claim to have gained market share in the business-to-business parcel segment and higher value e-commerce goods.
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