Colography: USPS Gains Share of U.S. Air Market

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The U.S. Postal Service gained share of the U.S. domestic air cargo market in the first six months of 2005, a phenomenon that hasn't occurred for years, The Colography Group Inc. said in the midyear 2005 edition of its Domestic Air Cargo Trends report.

The report, issued May 9, is one of a series of semiannual reports on the U.S. domestic air express and air cargo markets.

U.S. air shipment growth in Q2 2005 exceeded growth in the nation's gross domestic product, which the Atlanta company called encouraging for U.S. domestic air trade. This was the first quarter dating to 2001 that air shipment growth exceeded GDP growth.

But domestic air growth still lagged that of the major air-competitive surface modes, such as ground parcel and less than truckload, underscoring the ongoing migration of domestic traffic from air to lower-cost regional trucking options.

The postal service's share of domestic air shipments rose to 37.6 percent in the first half of 2005 from 36.7 percent in the year-earlier period, The Colography Group found. UPS fell to 21.1 percent from 21.6 percent, and DHL Express declined to 10.5 percent from 11.2 percent. The USPS remains the market leader, followed by FedEx Express with 30.1 percent.

"Though this is backward-looking data, it should be noted that long-term trends, once established, tend to remain in place for a while," said Ted Scherck, president of The Colography Group. "Improvement in air volumes over the past several years has been striking, and fast forwarding into 2006 we continue to see upbeat results for domestic air activity. As for the postal resurgence, only time will tell if the market share gains in 2005 are a lasting trend."

Other findings in the midyear 2005 report:

  • 1.2 billion shipments moved in U.S. domestic air service, up 2.2 percent from the year-ago period. Revenue reached $16.2 billion, up 3.9 percent.
  • Domestic letter/envelope volume was flat, package volumes rose 2.8 percent while airfreight shipments climbed 2.2 percent. Revenue increased year over year for all three categories.
  • Revenues continued to rise because of higher fuel surcharges. The effect of fuel surcharges intensified after Hurricane Katrina and then in the upward spike in oil prices during spring 2006.
  • Deferred, or non-overnight, air traffic grew 4.1 percent and revenue rose 4.7 percent. But overnight air traffic decreased 0.3 percent with revenue climbing 3.3 percent. Shippers found value in more economical services that did not guarantee an overnight delivery.

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