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In 2025, Amazon delivered 6.7 billion parcels to emerge as the largest parcel carrier in the US. That puts it just ahead of the US Postal Service, which handled 6.6 billion after a drop in volume. This is the first time Amazon has taken the top spot.

That might sound like a simple ranking change, but it signals something more important. Control over delivery is shifting from traditional carriers to retailers themselves. In practical terms, this changes who owns the customer relationship, who sets delivery expectations and who captures the margin in e-commerce.

How did we get here? Over the past few years, Amazon has built out its own delivery network and taken back much of the last-mile work it once gave to companies like UPS. Instead of relying on partners, it now handles more of the journey itself, especially the final step to the customer’s door.

This gives Amazon tighter control over speed, cost and service. It also means it can move quickly when demand shifts. Another key point is that Amazon is no longer just delivering its own orders. It is now taking on delivery work from other businesses, including some that do not sell on its platform. That puts it in direct competition with traditional carriers in a new way.

At the same time, the overall parcel market is not growing quickly. Total volume reached 23.9 billion packages in 2025, up just 0.4%. That tells us Amazon’s rise is mostly about taking share from others, not riding a wave of new demand.

Now let’s look at what the traditional players are doing. UPS and FedEx are not chasing the same type of growth as Amazon. In fact, both are pulling back from certain parts of the market.

UPS saw volumes fall to 4.4 billion parcels. FedEx delivered 3.6 billion, with some growth but still facing pressure. The key issue is simple. Last-mile delivery for lightweight e-commerce goods is expensive and often low margin.

Think about the cost of sending drivers into residential areas, making many stops with small packages. It is complex, time-consuming and not always profitable at scale.

Because of this, UPS and FedEx are changing direction. They are focusing more on deliveries that pay better, such as heavier packages, longer-distance shipments and B2B logistics.

This shift makes sense from a cost perspective. But it comes with a trade-off. B2C deliveries still make up 75% of the parcel market. B2B accounts for just 25%. By stepping back from last-mile residential delivery, these companies are leaving a large part of the market open to others.

There is another challenge. The type of shipments they are targeting is relatively limited. Less than 5% of B2C parcels weigh more than 50 pounds. Fewer than half travel more than 300 miles. That narrows the opportunity even further.

So if the largest carriers are stepping back, who is stepping in? The answer is a mix of smaller and more flexible players.

Alternative carriers such as OnTrac, Veho, UniUni and Better Trucks are growing quickly. Together, they increased volume by 13% to 2.6 billion parcels.

At the same time, large retailers are building their own delivery networks. Walmart and Target are two clear examples. Like Amazon, they want more control over how orders reach customers.

This is leading to a more fragmented market. Instead of a few dominant players, there are now many companies handling different parts of the delivery process. These smaller carriers often focus on specific regions or types of delivery. That helps them keep costs lower and operate more efficiently in the areas they serve.

Technology is also helping. Better routing tools, real-time tracking and data systems make it easier for these companies to compete, even without the scale of UPS or FedEx.

Now let’s step back and look at where the market is heading.

Even though volume growth is slow, revenue is still increasing. The US parcel market reached $196 billion in 2025, up 4.1%. Average revenue per parcel rose to $8.20, mainly due to price increases and added fees.

Demand is still strong. The average adult receives 1.84 parcels per week, and carriers handle around 91 million deliveries each weekday. But how those parcels move is changing.

One of the biggest shifts is distance. Deliveries are getting shorter. Companies are storing products closer to customers using multiple fulfillment centers. This reduces shipping time and cost.

For example, some services now move parcels less than 150 miles. That favors local and regional delivery networks rather than national long-haul systems.

Looking ahead, the market is expected to grow to 26.8 billion parcels by 2028, with a 3.9% annual growth rate. Much of this growth will come from changes in retail. Physical stores are holding less inventory and shipping more items directly to customers.

All of this points to a market that is still evolving. Amazon is leading with a highly integrated model. Traditional carriers are focusing on profitability over volume. Smaller players are filling the gaps with flexible, targeted services.

For anyone watching the logistics space, the key question is no longer just who is biggest. It is who can build the most efficient and adaptable delivery network.

Sources

Yahoo Finance