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Fulfillment Operator Margins Collapse as Shipping Costs Surge Past Revenue Growth

Fulfillment operator margins contracted sharply in the second quarter, with cushions narrowing to near zero from 9.6 percentage points, new network data reveals. The deterioration stems from parcel shipping costs accelerating at roughly triple the pace of gross merchandise value expansion.

Shipping expenses climbed approximately 13 percent year-over-year by quarter's end, driven by carrier mix adjustments, dimensional weight charges, and contracted rate increases. Order volume growth nearly doubled, climbing from roughly 4 percent to 8 percent, while GMV expanded just 4 percent. This indicates consumers are purchasing more units at lower price points.

Analysts project parcel inflation will remain elevated at a minimum of 12 percent through the fourth quarter before peak season surcharges—potentially adding 6 percent or more—compress margins further. Lean inventory levels, currently at their tightest in months, present additional risk heading into peak demand periods.