Amazon Surpasses USPS as Top U.S. Parcel Carrier: A 2025 Market Shift Reshaping Freight and LTL Dynamics

In a pivotal development for the U.S. parcel delivery industry, Amazon overtook the U.S. Postal Service as the nation’s largest carrier by volume in 2025, according to ShipMatrix Inc.’s annual parcel market study released March 16, 2026. Amazon handled 6.7 billion parcels—a robust 9.8% year-over-year increase—while the USPS delivered 6.6 billion pieces (down 8.3%). This marks the first time a private entity has claimed the top spot in domestic parcel volume, signaling a profound realignment of last-mile logistics.

The shift is not isolated to Amazon’s own e-commerce ecosystem. The company’s logistics arm, Amazon Logistics, has aggressively expanded third-party contracts with sellers who do not operate on the Amazon platform, further fueling its volume growth. Meanwhile, traditional giants UPS and FedEx are intentionally ceding ground in the commodity residential delivery segment, focusing instead on higher-margin B2B and complex e-commerce shipments.

2025 Parcel Market Snapshot

• Total U.S. parcel volume: 23.9 billion pieces (+0.4% YoY) — essentially flat, reflecting a mature market with shifting carrier shares.

• Amazon Logistics: 6.7 billion parcels (+9.8%) — now the clear volume leader.

• USPS: 6.6 billion (−8.3%) — slipped to second place.

• UPS: 4.4 billion (−8.3%) — sharp volume decline.

• FedEx: 3.6 billion (+5.9%) — modest growth.

• Alternative / emerging carriers (UniUni, Veho, OnTrac, Better Trucks, Jitsu, SpeedX, Gofo, etc.): 2.6 billion (+13%) — fastest-growing segment.

Revenue tells a different story:

• UPS: $58.3 billion — still the revenue leader.

• FedEx: $57.1 billion.

• Amazon Logistics: $38.5 billion.

• USPS: $32.5 billion.

• All other carriers: $15 billion (+15.4% YoY).

Average revenue per parcel rose to $8.20 (up from $8 in 2024), driven by general rate increases and expanded surcharges from the legacy carriers.

Strategic Retreat by UPS and FedEx

The report highlights a deliberate pivot by UPS and FedEx away from low-yield, lightweight residential e-commerce deliveries—the classic “last-mile” segment from fulfillment centers to doorsteps. Instead, both carriers are:

• Consolidating ground facilities.

• Reducing capital investment in commodity last-mile infrastructure.

• Targeting heavier parcels (>50 lbs), longer-haul shipments (>300 miles), high-density routes, and B2B logistics where they can command premium pricing for complex services.

This strategic retreat reflects economic reality: the high fixed costs of maintaining global integrated express networks are not sustainable when competing for low-margin, short-distance residential volume.

However, the market reality poses challenges:

• B2C still dominates — 75% of the parcel market remains consumer deliveries.

• Shorter distances — Amazon’s regional fulfillment strategy, combined with third-party networks (Radial, ShipBob, Shiphero, Stord), has pushed average delivery distances down significantly.

• Limited high-margin opportunities — ShipMatrix data shows <5% of B2C parcels exceed 50 lbs, and fewer than 50% travel more than 300 miles—meaning the pool of “premium” parcels is smaller than legacy carriers’ networks were built to serve.

Even FedEx’s recent partnership with Amazon (resuming residential delivery of larger, hard-to-handle shipments after a 2019 split) reflects this recalibration: focusing on niches where yields justify the effort.

Broader Freight and LTL Implications

This parcel market evolution has direct and indirect effects on Less-Than-Truckload (LTL) and the wider freight ecosystem:

• Last-mile handoffs — Reduced residential volume from UPS/FedEx may decrease feeder loads into LTL networks in some lanes.

• B2B and mid-sized growth — The legacy carriers’ pivot toward higher-value, longer-haul, and complex shipments creates opportunities for LTL in distribution center replenishment, multi-zone B2B moves, and heavier e-commerce freight.

• Capacity dynamics — Emerging last-mile providers (often using independent contractors) compete for CDL drivers, adding pressure to trucking labor markets.

• E-commerce tailwind — U.S. adults now average 1.84 parcels per week (91 million pieces moved daily). ShipMatrix forecasts the market growing at a 3.9% CAGR to 26.8 billion pieces by 2028, driven by ship-from-store expansion and technology converting more browsers into buyers. This sustained growth supports LTL in parcel-to-LTL transfers and regional distribution.

Strategic Recommendations for Shippers and Carriers

Amazon’s volume dominance signals a new reality: the world’s largest retailer is now the dominant last-mile player in its ecosystem—and increasingly beyond it. Traditional carriers are adapting by focusing on premium services, creating openings for LTL in the middle market.

At Gain Consulting LLC, we recommend:

• Hybrid carrier portfolios — Combine Amazon Logistics, USPS Parcel Select, regional providers, and legacy LTL for optimal cost/service balance.

• Target B2B lanes — Position for growth in mid-sized, multi-zone, and complex shipments as UPS/FedEx retreat from lightweight residential.

• Secure capacity — Lock in LTL space in distribution-adjacent lanes to capture e-commerce fulfillment surges.

• Monitor alternative carriers — Evaluate emerging players for cost advantages, but assess service consistency and scalability.

The full ShipMatrix annual parcel market study provides granular carrier benchmarking, volume/revenue breakdowns, and forward-looking forecasts. If this shift is reshaping your parcel spend, last-mile strategy, or LTL network planning, contact Gain Consulting LLC today. We turn carrier landscape changes into competitive advantages for shippers and logistics providers.

Follow us on X @gainconsulting_ for real-time updates on parcel trends, e-commerce logistics, freight pricing, and supply chain strategy. For the complete ShipMatrix report, see the original FreightWaves coverage or contact ShipMatrix directly.