UPS is reportedly in talks with at least one US trucking firm to offer 2-man in-home deliveries of large, heavy goods (furniture, fridges, couches, treadmills etc.) in the USA to gain a share in one of the fastest growing e-commerce segments.
The company told Reuters that it is now looking to enter the fast-growing “white glove” delivery market as Amazon, Wayfair and other e-commerce companies are competing for market share against chains like Crate and Barrel and big-box stores.
According to Reuters, a source familiar with the matter said UPS is in talks to hire trucking company Werner Enterprises to help it compete in this area, potentially by the end of 2018. Werner launched its “final-mile” service in 2016 which it has been expanding over the last year. Details of a possible agreement were not disclosed due to the early stages of the discussions, the source added.
Werner declined to comment on the matter, and UPS did not reveal who it is in talks with.
Some of the major players in the segment include sector leader XPO Logistics as well as SEKO Logistics, J.B. Hunt and Ryder.
According to Transport Futures economist Noel Perry, the last-mile delivery market could grow to about $12 billion over the next decade, from about $3.7 billion today, driven by the increasing demand from younger online shoppers buying everything online including bulky items.
When asked about the strategy with bulky goods in an interview with Reuters, UPS Chief Operating Officer Jim Barber said the company has decided “it can’t ignore the rising demand for in-home deliveries of furniture, mattresses, and treadmills, and was evaluating different ways to handle the larger cargo.”
“You got bigger products moving through networks across the globe,” Barber said. “What we have to do is try and figure out the right way to get them in the right network as we move forward.”
Barber did not comment on a potential partnership with any specific company and said that UPS has not made a final decision “because you have to balance it with our Express network, our labor constraints and our strategy going forward.”
UPS and its competitor FedEx currently deliver parcels weighing up to 68 kg to a recipient’s door step, and neither carries packages into a person’s home or handles so-called white glove services such as product assembly or installation.
As the largest provider of last-mile bulky deliveries in North America, XPO Logistics has been actively expanding its home delivery services in the USA and Europe recently. The US company operates in 32 countries, with over 95,000 employees and 1,455 locations.
In September 2017, XPO announced the start of a major expansion of its last mile network in the US with 85 last mile hubs expected to be positioned within approximately 90% of the population this year. The fast-expanding US company facilitates approximately 13 million deliveries a year.
In February 2018, it announced new last mile operations in five European countries – the UK, Ireland, the Netherlands, Spain and France. XPO expects to manage more than 750,000 last mile deliveries from retailers and e-commerce companies in Europe this year through the new service, which it first announced last November.
