Last-Mile Duopoly Breaks: 55% of Retailers Ditch FedEx/UPS

The U.S. parcel market is undergoing a structural shift: 55% of retailers now use carriers outside the traditional FedEx, UPS, and USPS trio, with more than a third actively moving volume away from the legacy leaders. This marks a transition from carrier diversification as a cost hedge to a core operational requirement, driven by consumer expectations for 2.6-day free shipping and the growing dominance of Amazon, which handled 6.7 billion parcels in 2025 and passed USPS as the largest domestic carrier. The economics are stark: per-package costs are rising year-over-year for 83% of retailers, yet 88% of shoppers report late deliveries damage brand loyalty, putting roughly 20% of retail demand at risk.

FedEx and UPS are deliberately exiting commodity last-mile delivery to pursue higher-margin B2B logistics and premium e-commerce services, but this pivot conflicts with market reality: B2C now represents 75% of total parcel volume versus 25% for B2B. Alternative carriers including Veho, OnTrac, and Jitsu collectively grew volume 13% to 2.6 billion units, with revenue climbing 15.4%, while Amazon's flywheel (fast delivery driving density, lowering unit costs, enabling faster delivery) continues raising the service standard across the entire industry. For supply chain leaders, this shift transforms last-mile strategy from a back-office procurement exercise into a technology and reliability problem.

Retailers now require orchestration platforms to manage 4-12 carriers simultaneously, monitor performance in real time, and reroute shipments dynamically. The winners will be those who master multi-carrier networks and predictive reliability, turning delivery into a competitive advantage rather than a commodity cost center.