FedEx and UPS to compete with USPS for last-mile delivery

May 1, 2017

  • UPS and FedEx will soon offer a Zone 1 option for packages that have previously been diverted to the U.S. Postal Service for last mile delivery, DC Velocity reported last week.

Last-mile delivery is an ongoing logistics puzzle as delivery companies continue to struggle with how best to manage the growing e-commerce-fueled market.

That UPS and FedEx are moving to fully handle their own e-commerce deliveries rather than rely on USPS’ network shows they expect revenues from high volumes to finally outpace costs. In large part, that’s because more than before, consumers appear to be willing to pay for convenience. A recent survey by McKinsey found that while 70% of the e-ecommerce market is satisfied with the cheapest form of delivery, 23% are willing to pay extra for same-day delivery and another 5% would pay more for a guaranteed time of delivery.

Yet, many of the costs associated with last-mile delivery come from missed deliveries, inefficient routes, and the challenge of meeting high consumer expectations. USPS’ need to run local routes meant such challenges were but marginal costs for the carrier. To compete, UPS and FedEx have sought to improve efficiency at sorting facilities, explore cheaper last-mile delivery options (such as bikes), or create in-store pickup programs to ensure package safety and reduce missed deliveries.

Overall, addressing this final challenge appears to be within the wheelhouse of both UPS and FedEx, and is an important step to the carriers’ transition to boost profits from e-commerce.

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27 Comments on "FedEx and UPS to compete with USPS for last-mile delivery"

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Christopher Paradise

You mean they will start delivering their own parcels? Shocker.

Laura Kay

yea, good luck with that. we save them too much money

Shani Kin

Then the customers will really get a sticker shock and actually see who’s delivery service is less expensive and better.

Sheree Leffel Knopf

Good. We’re exhausted.

Karen Hey-Zeller

That’s what I say .. go ahead have at it …

Bunny Yeager Wright

They already give us their last mile!

Raylene Miller

But its not mail count yet.

Charlotte DeZern Daniels

They’ll wait. Have no fear.

Rhonda Kb Pride

Maybe that’s something they and USPS agreed on…hum

Bill Kennedy

We to poor to have Planes

Carrie Padgett

Let em have it!!!!

Lauren Hauber

Travis Bird if only ?

Leah Wolfe

They can have it as far as I’m concerned. Rural Carriers are neither paid or equipped to deliver packages to 100, give or take a few, to peoples doors. I am out of my vehicle 50 times a day and spending an extra hour on the street. Cripes almighty I had almost 300 packages on a Monday before Christmas. I fill a pickup truck with a cap to the roof almost everyday. some stuff is 8 ft long and has a team lift sticker! Yeah they can have it!

Nichole Hilzley

There must be a count on the horizon. Smdh.

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