Pandemic e-commerce boom may be slowing

E-commerce spending may be slowing after a pandemic boom, according to the latest financial reports from UPS and Amazon.

UPS shares fell to the lowest in three months this week after domestic US volume in its second quarter dropped 2.9%, and ground shipments specifically were down 4% on the previous year.

Average daily volume was down 0.8%, due mainly to the fall in domestic demand. The average daily volume for business-to-consumer shipments was down 15.8%.

However, business-to-business shipments were up 25.7%, and daily international shipments were up 12.7% year on year.

UPS has been taking on a “better, not bigger” approach this year, focusing on small business and higher margin shipments rather than sheer volume.

Despite falling volume, the company reported record earnings in the second quarter, with a 14.5% increase from 2020 to $23.4 billion.

In the same quarter, Amazon’s core e-commerce business grew 15%, which is the slowest rate since 2019. Amazon shares fell about 7% after the news.

Amazon’s chief financial advisor, Brian Olsavsky, said that in the United States and Europe especially, “people are getting out more, doing other things besides shopping.”

Source: Reuters, Financial Times, Air Cargo News