Heading into the back half of the year, retailers are looking ahead to the all-important end-of-year period and planning their shipment strategies. Analysis of Convey shipment data revealed some good news: parcel on-time percentage (OTP) has stabilized after climbing from historic lows during pandemic shutdowns, establishing a healthy position from which to launch the holiday season.
At the same time, last-mile freight delivery of consumer goods is struggling amidst multiple challenges. In the past year, Fedex has led the way in imposing limits on both freight and parcel shipments and culling unprofitable freight customers in an effort to improve reliability — tough choices that other carriers are poised to make in hopes of avoiding logjams during the peak season. Retailers are already jockeying for carrier capacity, and looking to regional carriers to fill anticipated gaps in service.
Convey analyzed data derived from tens of millions of packages shipped from more than 500,000 locations in North America in July 2021 to benchmark on-time performance for retail last mile deliveries for FedEx, UPS, USPS and regional carriers. The data revealed:
Overall OTP remains consistent for parcel deliveries
Overall parcel OTP for July of 2021 remained at 83%, the same as June’s parcel OTP. This percentage marks a year-over-year improvement of five percentage points compared with July of 2020, when carriers delivered 78% of packages on-time as they adapted to increased demand and volume during the first summer months of the pandemic.
USPS parcel OTP continues its climb
Performance for USPS parcel deliveries rose slightly in July of 2021, with 93% of packages delivered on time -- two points higher than in June of 2021 and five points higher than July of 2020. Convey’s index shows steady improvement throughout 2021, which USPS attributes to increased focus on ground delivery. USPS’ performance continues to lead the “big three” in on-time performance: UPS’ OTP for the month was 88%, while Fedex continued to lag at 73%. Fedex’s OTP was the same as June, but still represents a six-point drop compared with July of 2020.
Last mile freight struggles amidst multiple challenges
While parcel delivery OTP has now improved to nearly equal pre-pandemic levels, last-mile or final mile freight delivery performance for consumer goods plunged in 2021. This mirrors overall challenges to the worldwide freight supply chain that include climate disasters, resurgent coronavirus infections, driver shortages, and fuel price increases. Last mile retail freight OTP dropped to 71% in July of 2021, continuing its steady decline since before the pandemic and marking the lowest point this year to date.