How Profitable is a Shipping Business (2024 Stats)?

The U.S. courier and shipping business market is a dynamic and expansive sector, boasting a revenue of $167.7 billion in 2023. But how do individual courier businesses fare within this vast industry?

What kind of revenue can they anticipate? And what are the costs associated with initiating and maintaining a shipping business?

In this article, we dissect the shipping industry, offering insights into market segments, average revenues, and startup costs.

Through a detailed examination, we provide a lucid understanding of the economic parameters that shape the shipping sector in 2023. Let’s navigate the waters of the shipping industry together.

Shipping industry market overview

As per IBIS, the shipping market in the U.S. represented revenue of $167.7 billion in 2023 and is expected to grow to $205.6 billion by 2028.

Ground deliveries represent the largest share ($101.3 billion) followed by air transit services ($64.9 billion), and other services including messengers and local deliveries ($1.5 billion). Yet, with over 455,000 courier businesses across the country, the competition is also fierce.

How much revenue does a shipping business make?

Using the same source earlier, it’s safe to assume that the average turnover for a courier business is around $369,000. Indeed, the U.S. shipping industry is worth $167.7 billion in 2023 and there are about 455,000 courier service providers across the U.S.

Now using the data from more than 1,002 franchised shipping businesses, a shipping business earns $1,053,000 in gross revenue per year on average. This number is the average gross revenue per service provider from 1,002 franchisees of the largest 5 shipping franchises in the U.S.

With an average courier fee of $15 per parcel, that’s a total of ~70,200 parcels per year. Assuming 250 working days per year, that’s on average 280 parcels per day per service provider.

Yet, not all courier service providers have the same yearly revenue. Logically, some will earn more than others because of many factors like their location, business size, efficiency, market demand, and the range of services they offer.

When it comes to pay, assuming you are both the owner and the contractor, the average annual salary you can expect is $249,000 which ranges between $132,500-$332,500.

How much does it cost to start a shipping business?

You would have to invest an average of $95,000 to $206,000 to open a shipping business.

The upfront investment covers costs like rent and leasehold improvements, licenses and permits, warehouse tools and equipment, vehicle lease/purchase, office furniture and fixtures, insurance, utilities, marketing, and working capital for the first few months to finance the business (marketing, supplies, travel, etc.).

Fixtures, mailboxes, and packages lockers (22%)
Leasehold improvement (32%): includes flooring, signage, and construction services needed to build the courier center.
Initial marketing (4%): marketing program for the new business
Training expenses (2%): travel, lodging, and meals for the initial training
Equipment and office software (7%): warehouse tools and equipment, vehicles, office equipment, computer hardware, software programs and licenses, etc.
Business licenses and other fees (4%): business licenses, business permits, professional and legal fees.
Deposits and prepaid expenses (9%): utilities, security, and/or rent deposits.
Working capital (13%): funds needed to operate the business for the first 12 months to pay for operating costs (marketing, supplies, travel, etc.).
Other expenses (7%): other start-up supplies and inventory, insurance, miscellaneous expenditures, etc.