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UPS encounters unexpected drop in parcel volumes as e-commerce growth slows

April 27, 2022

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Home delivery demand skyrocketed when the COVID-19 pandemic took hold, but the pace of growth has finally slowed and cooled demand for UPS’ services. E-commerce sales grew just 2.6% year over year in March, the weakest gain in more than three years, according to GlobalData research. Consumers shifted more of their spending from goods to services while enduring inflation.

“The fear is that, after a strong 2-year period, the company could see revenue growth waver thanks to high inflation,” Patrick Donnelly, senior analyst at Third Bridge, said in emailed remarks about UPS’ results. “We can expect parcel volumes to decrease in line with consumer spending.”

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