But e-commerce sales are on the rise, leading to a surge in package volume and legacy shippers don't have the capacity or network to quickly deliver parcels. This has opened cracks in the space and presented a significant opportunity for last mile delivery startups to emerge.
From crowdsourcing to drones, heres how 14 legacy companies and startups are evolving to tackle the growing delivery problem.
FedEx offers door-to-door delivery service for time-sensitive packages through FedEx SameDay. Users can apply for accounts to use exclusively for same-day services 24/7/365 in all 50 US states. The logistics giant also offers SameDay Freight services for shipments greater than 150 lbs.
FedEx Freight has plans to run five pilot programs for last mile delivery service, called FedEx Freight Direct, in the first half of 2019, first in the Dallas/Fort Worth market, followed by Atlanta, Tulsa, Oklahoma City, and Omaha. Standard service will include drivers bringing shipments to a residences first point of entry, while premium service would include the white glove treatment of carrying shipments to the customers room of choice, unpacking boxes, and possibly assembling products if necessary,
Learn about FedEx same-day delivery .
During the 2017 holiday season, UPS struggled to bring consumers their parcels on time due to higher than expected volume, which upset its high-volume retail partners like Macys and Walmart. And with the shadow of Amazon steadily encroaching, the pressure is on UPS to offer faster service.
In addition to standard ground and 2-day shipping, UPS provides a range of urgent and same-day delivery services with UPS Express Critical. Options include Air, Surface, Charter, Hand Carry, International, Secure, Inside Precision, and Value Added Services depending on the senders shipment needs.
Its worth noting that, despite the 2017 holiday delivery pains, consumers like UPS tracking features best and consider it the leader of all logistics companies in customer service, according to Business Insider Intelligences 2018 Delivery Trust Survey.
Learn about UPS same-day delivery .
Greenwich, Connecticut-headquartered XPO Logistics has over 1,500 locations in 32 countries. It had an impressive Q2 2018 , largely aided by introducing an online freight marketplace to help its customers find carriers to move their shipments, and its 2015 acquisition of UX Logistics has improved last-mile delivery capabilities by offering a broader network of truck brokerage, expedited transportation, intermodal, technology-enabled contract logistics, and freight forwarding services.
XPO also offers expedited deliveries globally, and same-day courier services completing orders 24 hours a day, 364 days a year in the Tri-State areas of New York, New Jersey and Connecticut. XPOs courier service is comprised of uniformed employees, fleets of vehicles, and flexible options: same-day, next-day or pre-planned (routed and scheduled). For businesses employing their courier services, XPO offers customized engineering solutions, API/EDI connectivity for retail and e-commerce clients, and dedicated account managers.
Learn about XPO .
The post office is lagging in same-day service for consumers, but offers Priority Mail Express, which comes with an Overnight Delivery Guarantee by 3pm (or earlier, if available, and at an additional charge).
The USPS calculates its Priority Mail Express prices based on the weight of the piece (up to 70 lbs), and how far its traveling, unless the sender is using USPS-provided Priority Mail Express Flat Rate packaging, which starts at $24.70.
For businesses, USPS does offer more robust same-day service through its The Last Mile Technologies experience. This suite of last mile solutions provides shipping transparency and efficiency for business mailers and end-consumers alike with intelligent scanning and documentation, real-time tracking, predictive delivery times, dynamic routing, and delivery performance analytics.
Walmart has been steadily pushing into grocery delivery and even tapping into self-driving vehicles for pilot programs in select locations. Same-day grocery comes with a minimum purchase order of $30 and a $9.95 flat rate delivery fee, or customers can choose to pick their groceries up at a Walmart location for free. For in-store pickup, consumers order online, select a time slot, and Walmart employees will do all the in-store shopping and load their cars for them.
Same-day store pickup is available for some non-grocery items as well, and customers can track estimated arrival times and score in-store pickup discounts through the Walmart app.
The same-day delivery options are more robust for Walmarts subsidiary Jet.com, an online marketplace geared towards more affluent urban consumers. In the summer of 2018, Jet.com added same-day delivery to New York City for groceries, everyday essentials, and select merchandise.
Finally, autonomous vehicle delivery isnt the only tech innovation on the horizon for Walmart; the company filed a patent for a blockchain-based system that would allow delivery drones to exchange information slashing delivery times and driving down costs.
Amazon presents the biggest near-term threat to the UPS and FedEx duopoly due to its size, innovation, and high level of consumer trust. Shipping is Amazons second highest cost, and it continues climbing every year ($28bn in '18e and $38bn in '19e) as the e-commerce giant steadily builds out its logistics infrastructure and delivery network.
A few of the retail behemoths many recent logistics pushes include its Shipping with Amazon third-party solution, providing overhead cost incentives for independent contractors to launch logistics companies to make deliveries on Amazons behalf, acquiring PillPack for prescription delivery, and developing autonomous drone prototypes and architecture in its Project Wing.
Prime members are already familiar with the companys 2-day free shipping policy and its on-demand same-day delivery service, Prime Now , which guarantees free one- and two-hour deliveries. Since 2015, the company has been building out its same-day and last mile capabilities with Amazon Flex crowdsourced delivery, which lets customers order and receive packages through Prime Now.
The app is open to people who have cars (except in select regions allowing commercial bicycles), making the service particularly attractive to rideshare drivers who may want to make extra money without having strangers or potentially disruptive passengers in their cars.
Anyone 21 or older with a smartphone, car, and valid drivers license can log into the app and schedule their availability to start making deliveries, which originate at an Amazon location, store, or restaurant. Drivers use their smartphone camera and GPS to scan packages and get turn-by-turn directions to their destinations. As long as they deliver the package within the allotted time frame, couriers make $18-25 an hour all through a cashless transfer to their digital wallet on the app.
Learn more about Amazon Flex .
Postmates is a San Francisco-based urban logistics platform operating in 18 US cities that aims to enable anyone to have anything delivered on-demand. The mobile platform is available as an iOS or Android app and connects customers with businesses and nearby couriers to place orders from local stores and restaurants.
The company touts ability to empower communities to shop local without waiting, and empower businesses to better compete with large companies by offering delivery or pickup through their open API. Users can choose to pay delivery fees ad hoc or pay $7.99/month (billed annually) for a year of free delivery with Postmates Unlimited. The service also offers customizable gift cards.
Learn about Postmates .
Deliv is a general use last mile solution offering same-day service to over 4,000 omnichannel businesses in 35 cities across the country, including Macys, Best Buy, Walmart, and IBM. Instead of just fulfilling ad hoc deliveries for consumers, Deliv seeks to be a long-term business partner solving companies last mile problem evidenced by its breakdown into Deliv Small Business, Deliv Enterprise, and Deliv Fresh for groceries.
It offers SLAs, performance metrics, and integrations into business online checkout processes. And the company is growing. In February, 2018, it launched Deliv Rx to extend these same-day services to patients, doctors, pharmacies, hospitals, labs, and clinics.
Learn more about Deliv .
Tampa-based startup Hitch gives consumers, the choice to be Shippers, Travelers, or both. The platform touts tapping into people power by pairing up shippers (the people placing the orders) with travelers (the local couriers) who are already heading in the direction that the item needs to go.
Shippers put out requests to have packages delivered, and Travelers can input travel information to see if there are any available deliveries along their route. The app uses GPS to find the quickest route and provide tracking, as well as camera functionality to show proof of delivery.
All payments are exchanged through Hitchs third-party payment processing partner, Stripe, and users rate each other after each delivery as a part of the community vetting process.
Learn more about Hitch .
Darkstore is San Francisco-based urban fulfillment technology company operating in 40 US markets. Its key value proposition is Hosted Shopping Cart, which allows businesses to offer one hour delivery, same-day delivery, or standard shipping by adding just one line of code to their online checkout process.
Darkstore considers itself delivery agnostic; rather than making the deliveries itself, Darkstore leans on robotic automation, AI, and its own API to intelligently route deliveries to the nearest carrier. Some of its delivery partners include Deliv, UPS, FedEx, Postmates, and the USPS.
Learn about Darkstor
Shiphawk is a Santa Barbara-based SaaS company branding itself as the Smart Transportation Management System (TMS). Its transportation management and shipping software, TMS 2.0, helps businesses save money, automate workflows, provide an on-brand buying experience, and run data-driven supply chains.
The all-in-one shipping intelligence solution offers multi-carrier rating, smart packing and order fulfillment, a carrier network for rate optimization, on-brand tracking, internal documentation, and detailed reporting and analytics to monitor carrier performance.
Learn about Shiphawk .
San Francisco-based Narvar is focused on improving everything that happens after the Buy button. The platform enhances three aspects of the post-purchase phase of the customer journey: Convert by setting delivery expectations and communication preferences in cart, Engage with customers by giving them branded experiences while they wait, and Care for the relationship by making the returns process seamless and easy.
Narvar uses machine learning to help businesses monitor interactions and understand customer trends. It integrates directly with e-commerce platforms, marketing tools, email service providers, and user-generated content, and leverages a network of more than 300 global carriers for fast, efficient delivery and returns.
Learn about Narvar .
13. P iggybee
Piggybee is a Brussels-based crowdshipping community. The service, which originally focused on European locations but has since expanded more globally, allows users to search for travelers much like theyd search for flights by browsing departures and arrivals in different cities. Users also have the option to post their trip to request a delivery to a specific location.
When a user has found a traveler headed to their desired destination, they can message them to discuss purchase price and tip. In the spirit of travel, the service encourages users to consider trading accommodations, transport, or local advice in lieu of paying couriers a fee. After delivery, travelers are tipped through Piggybee MoneySafe, and rated.
Learn about Piggybee .
Entrusters is an Argentina-based crowdshipping platform that touts shopping without borders to let consumers buy the best items at the best prices from abroad. It connects users to Trusted Travelers who use their extra luggage space to transport deliveries internationally.
Originally tied to Amazon, the platform has expanded to allow people to purchase items from any URL by selecting Buy It Now or requesting a delivery to their desired location. Like Piggybee, Entrusters encourages sharing authentic local experiences but, unlike Piggybee, its couriers can set delivery fees to help offset travel expenses.
Learn about Entrusters .
Last mile, same day & crowdsourced delivery market outlook
Business Insider Intelligence, Business Insiders premium research service, has written an in-depth report examining the rise of the crowdsourcing model in the last-mile delivery space.
The CrowdSourced Delivery Report details the top use cases for crowdsourced deliveries, as well as the benefits and challenges of using this model for delivering online orders. It provides insights into how crowdsourced deliveries can be better optimized for e-commerce, and explains the long-term potential of last mile delivery startups populating the space as automation starts to play a bigger role in the last mile.
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