Retailers Diversify Last-Mile Delivery Carriers Beyond UPS and FedEx
The dominance of UPS (UPS) and FedEx (FDX) in last-mile delivery is being challenged as retailers increasingly turn to alternative carriers. A survey by AlixPartners shows that nearly half of U.S. retailers now use non-FedEx, non-UPS providers for deliveries, with over a third actively shifting business away from the traditional leaders. This shift reflects consumer expectations—now requiring an average delivery time of 2.6 days—which has made carrier diversification essential to maintaining customer satisfaction and loyalty. The rise in alternative carriers is evident as companies like Veho expand their networks using crowdsourced drivers, offering flexible shipping options such as variable delivery windows for lower costs. Meanwhile, UPS and FedEx are pivoting away from commodity last-mile deliveries toward more profitable B2B logistics services. However, this transition comes with challenges: the majority of parcel volume is now in business-to-consumer (B2C) shipments, while their target segment—business-to-business—is shrinking to just 25%. The financial impact on shippers has been significant as well. Ground parcel rates have risen sharply compared to a 2018 baseline, with surcharges increasing notably during peak seasons in recent years.
Topics: Amazon consumer expectations FedEx retail logistics UPS USPS