Thursday, October 18, 2012

Ecommerce driving changes in delivery options

The explosive growth of ecommerce is creating many opportunities for the transportation and delivery industries. Customers are increasingly expecting free shipping, quicker delivery options and alternate delivery points. The advancements in IT, the rise of mobile devices such as smartphones and tablets are all assisting with this changing mindset. For transportation and delivery companies to respond to these changes, the ability to think creatively and to be flexible is vital for success.

While UPS SurePost and FedEx SmartPost have benefited greatly, it appears that same day delivery is of particular interest to not only providers but also to retailers. However a couple of months ago, Amazon’s CFO noted “We don’t really see a way to do same-day delivery on a broad scale economically.” Still, Amazon is testing the same day delivery concept in select markets such as Seattle. Not to be outdone, EBay and Walmart are also testing this concept as is the USPS. Startup companies such as Postmates and Shutl are utilizing advancements in IT and mobile devices and are also providing same day delivery mostly via courier services.

Not only is same day delivery an option but delivery to lockboxes typically located in high traffic locations such as within physical retail stores. Amazon has been testing this concept through its Amazon Locker service with 7-Elevens for a while. USPS is also testing the idea as is several startup companies such as BufferBox and Kinek. BufferBox and Kinek are both Canadian companies. While BufferBox provides lockbox services within Canada, Kinek offers Canadians an option to sign up for a US Shipping Address to save on international shipping and brokerage fees. Dropboxes for this option are located along the US – Canada border in US cities.

Additional startups within the delivery space include Shoprunner, a startup led by former Yahoo chief Scott Thompson. Shoprunner provides unlimited two-day shipping for a consortium of more than 60 retailers looking to compete with Amazon. Slightly different but one with great potential, TaskRabbit is reminiscent of reverse auctions in which users post a delivery request and the maximum they are willing to pay for the service. Uber is another interesting startup. Currently it transports people however it has expressed interest in delivering goods and is currently working towards this.

Ecommerce has spurred not only new concepts and ideas within the supply chain but also new companies are popping up to address logistical challenges resulting from the rise of ecommerce. Next month, Transport Intelligence will launch the first report in its eCommerce series, North America Ecommerce Logistics, that will look at these challenges as well as new companies and how traditional logistics providers such as UPS, FedEx, DHL and others are responding to these changes. Europe Ecommerce Logistics and  Asia Ecommerce Logistics  will follow in early 2013. For more information, please contact Cathy Roberson at