250 million packages a year, but profits are eroding: are shipping costs expected to rise?

The Israeli delivery market, handling 200-250 million packages annually and generating 10-12 billion shekels, suffers from severe profit erosion due to competition, rising fuel costs, driver shortages, and geopolitical disruptions. Industry executives warn that shipping fees may increase.

The Israeli delivery market, handling 200-250 million packages annually and generating 10-12 billion shekels a year, is under heavy pressure. Aggressive competition, along with rising fuel costs, driver shortages, traffic jams, and geopolitical disruptions, have cut profit margins to just 1%-3%. Industry executives warn they may be forced to raise shipping fees. The article reviews the challenges: extreme dependence on imports from China, a shortage of thousands of drivers, sorting and operational costs, and the impact of threats in the Bab el-Mandeb region on shipping routes. Solutions such as collection points and lockers are not preferred by customers, and 80% of international activity is routed to delivery points. The return rate stands at 15%-18% for domestic shipments.