UPS moves into same-day delivery with Roadie purchase

UPS has entered into an agreement to acquire Roadie, a technology platform  that enables same-day delivery with operations throughout the US.

The backdrop to the move is that some of the US integrator's major  retail customers, such as Amazon, Walmart and Target, are building up or have acquired gig delivery services to provide swift local delivery for a broad range of goods - everything  from fresh produce to heavy and bulky items of furniture.

In June this year, the Wall Street Journal quoted UPS' CEO Carol Tomé as saying that the company was exploring offering a same-day service in response to the pandemic-driven shift to e-commerce.

“We don’t have a same-day product today… and so we’re looking at it,” she said in response to an analyst's question. “We don’t have this all the way figured out… but we’ve got a team of people looking at it,” she commented.

The transaction, whose value has not been disclosed,  is expected to be completed in the fourth quarter of 2021.

It would potentially add new services to UPS' portfolio just as the end-of-the-year peak holiday shipping season kicks in and demand for delivery capacity and capability soars.

In a statement, UPS  said that its customers, including large enterprises, are increasingly looking for local same-day delivery solutions for goods of all types, not traditional packages. 

'Open doors'

“Roadie often provides service for shipments not compatible with the UPS network because of their size and perishable nature, and often because they are in shopping bags without the packaging required to move through the UPS system.”

The statement continued: “Roadie’s leading technology, combined with UPS’s portfolio, will open doors for new growth opportunities. Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities. The Roadie technology platform is purpose-built to connect merchants and consumers with contract drivers to enable efficient and scalable same-day local delivery services nationwide.”

'Roadie can flex dynamically'

In a statement last month, Roadie said its delivery volume grew more than four times in 2020.

The 'on-the-way' crowdsourced delivery app added more than 5,000 retail stores to its footprint, which includes major retailers such as Best Buy, The Home Depot, Tractor Supply Company and Walmart, among others while its delivery solution also provided a “lifeline” to many small retailers impacted by reduced in-store foot traffic, it said.

Last year, Roadie’s driver community grew more than 30% to 200,000+ nationwide. Roadie now covers more than 20,000 zip codes and 90% of US households. 

Founded in Atlanta in 2014, the platform’s major competitive advantages include its nationwide delivery footprint and flexibility at scale, the statement noted.

“Roadie can flex dynamically to meet customers’ unexpected spikes and lulls in demand, while enabling larger retailers to have a single delivery partner throughout the US Roadie also supports items of any size, including big and bulky, and offers community-focused customer support 24/7/365.”

Roadie's founder and CEO, Marc Gorlin, commented:  “When it comes to consumers’ preference for home delivery, COVID finished what Amazon started.”

He continued: “We want our stuff on our doorsteps, exactly when we want it. With another holiday peak season just around the corner, projected to blow old records out of the water yet again, Roadie’s in a great position to keep building… and to continue helping our customers win the retail game, regardless of how their own customers want to shop.”

Networks kept apart

Following the completion of the acquisition, Roadie will operate with the same name while UPS package car drivers will continue to deliver packages within the UPS network. Goods transported by Roadie will not cross into the UPS network and packages transported in the UPS network will not cross into the Roadie network, the statement underlined.