Courier Giants To Shut Down Hundreds Of Facilities
With the rapid expansion of e-commerce, courier companies are experiencing a golden age. However, the situation in the United States tells a different story. Despite an increase in the number of packages, the profits of courier companies have remained stagnant. The world's two leading courier giants, FedEx and UPS, have decided to downsize. These courier companies are set to close hundreds of facilities, potentially leading to thousands of layoffs. This situation could result in an increase in shipping fees.
Freight giants are set to shut down hundreds of their facilities.
According to the data, the total number of cargo shipments is projected to reach 30 billion by 2030. Despite the increase in cargo volume, companies have not experienced a surge in revenue growth. In 2024, the total revenue rose by a mere 2.7%.
In the US, major cargo companies like FedEx and UPS have decided to downsize. As the cargo volume increased, the average revenue per package decreased. In 2023, this figure was $9.10, but it fell to $9.09 in 2024. As consumers increasingly opt for 'fast delivery' options, this trend has led to a decline in the profitability of cargo companies.
Hundreds of facilities are set to close, leaving tens of thousands unemployed. This situation could potentially drive up freight charges.
FedEx is plotting to shutter more than 475 of its facilities across the United States by 2027.
On the other hand, UPS anticipates closing 200 of its facilities by 2028. In 2025, while 48,000 employees were laid off, an additional reduction of 30,000 positions is expected this year.
Both companies are strategizing to process more packages with fewer employees by investing in automation. According to experts, this move by the two cargo giants could potentially result in an increase in shipping fees.
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