Parcel Carrier Shakeup

What Shrinking Giants and Expanding Alternatives Mean for Shippers

The parcel delivery market is undergoing a quiet revolution. As UPS and FedEx strategically shrink and restructure their networks, a new class of alternative carriers is expanding rapidly—despite a soft volume environment. These contrasting strategies are redefining how competition, pricing, and service will look for parcel shippers in the coming months.

Restructuring Among the Big Two: UPS and FedEx

UPS and FedEx are aggressively retooling their networks, not for growth, but for efficiency. Both companies are focused on lowering their cost-per-package while still delivering competitive service levels. Here’s how:

• UPS is doubling down on automation. The company is modernizing and consolidating facilities, eliminating sortation at certain hubs, and trimming its workforce by 20,000 jobs. These changes come amid a continued departure from Amazon volume, as UPS reshapes its network for future profitability.
• FedEx is executing a far-reaching transformation by merging its Express and Ground operations into a unified network. Air operations are being scaled down to better match demand. The goal: a leaner, more efficient structure that can handle parcels at lower cost without compromising delivery speed or reliability.

For both carriers, the message is clear: scale back, automate, and cut costs—while maintaining enough service quality to remain competitive in a price-sensitive market.

Meanwhile, the Alternatives Are Gaining Ground

While the giants recalibrate, a growing number of regional and tech-enabled carriers are aggressively expanding their footprint. These challengers are no longer just niche players—they’re beginning to offer viable nationwide coverage and differentiated services. Here’s a look at who’s making moves:

• USPS is realigning its network to focus on ground transport. With the success of its Ground Advantage product and the launch of a new regional Priority Mail Next Day service, the Postal Service is pivoting away from its historical air-heavy infrastructure.
• Amazon Shipping remains quiet but active. Its coverage footprint continues to expand, and its logistics muscle is hard to ignore as it moves beyond its own eCommerce fulfillment needs.
• OnTrac launched service in the Midwest and added Sunday delivery in 2024, pushing closer to national coverage.
• Veho entered key markets like Louisville, KY and Richmond, VA in early 2025, and rolled out a 2–5 day “Premium Economy” delivery service aimed at cost-conscious retailers.
• UniUni is targeting 70% U.S. coverage by Q3 2025, positioning itself as a competitor to OnTrac in both reach and middle-mile capability.
• Jitsu expanded into the Midwest with operations in Cincinnati, Cleveland, Columbus, Indianapolis, Pittsburgh, and St. Louis—now reaching 122 million consumers.
• SpeedX added 2,000 ZIP codes to its network, achieving 1–2 day delivery capabilities to 175 million U.S. residents.

What It Means for Shippers

The shifting landscape raises important questions for logistics professionals:

• Can these alternative carriers continue to expand while operating sustainably and profitably?
• Will the USPS gain traction with larger enterprise shippers or remain dominant primarily in the SMB segment?
• Can UPS and FedEx lower their cost structures while maintaining service levels and staying price-competitive?
• When—and how—will Amazon Shipping emerge as a true nationwide player?

While the answers remain uncertain, one outcome is becoming increasingly clear: shippers now have more options than ever before. The competitive dynamics are likely to continue driving aggressive pricing and service innovation, especially in last-mile delivery.

Key Takeaway

As UPS and FedEx streamline, and upstarts scale, parcel shippers are entering a new era of opportunity. The challenge will be to navigate this complex ecosystem—leveraging the right mix of national and regional carriers to reduce cost, diversify risk, and maintain customer satisfaction.

Now is the time for shippers to evaluate their carrier strategies, renegotiate contracts, and test new delivery partners. The competitive pressure is real—and shippers stand to benefit.

Need help navigating these changes? Reach out to ebb Logistics to build your shipping profile and craft a tailored strategy that positions your business for long-term shipping success.

Contact Us Today!