The time for UPS to expand into Same-Day Delivery could be forming right before us with its’ recent announcement. Business Insider has reported that UPS has made a strategic investment into start-up company Deliv in order to study the same-day delivery model, analyzing how that market segment evolves. Same-day delivery is forecasted to reach $987 million by 2019. This is probably one reason that the world’s largest package delivery company is making strides to get on board with the popular service.
UPS’s managing director of the UPS Strategic Enterprise Fund, Rimas Kapeskas, commented about the investment in the phone interview. He said, “We don’t participate in the on-demand business as much, and the consumer side of this is still a bit of a mystery to us. This is a rapidly evolving marketplace and we thought we could learn more by being close to it.” This is the venture arm of UPS, which is leading a $28 million funding round for Palo Alto, California-based Deliv. The article didn’t disclose the investment size being committed to the venture, yet it did state that UPS will take a minority stake in Deliv and sit in on board meetings.
UPS and Deliv are learning from one another. “We are solving a different problem in the last mile,” Deliv Chief Executive Daphne Carmeli stated in a phone interview also. She went on to say, “and they (UPS) are looking to learn that model and looking to learn about growth in same-day delivery as we are interested to learn from their success.” Both have their respective niches to help each other gain more ground, ultimately to compete against Amazon.
In recent years, Amazon has built strategically-placed order fulfillment centers in order to implement what it is doing now–same-day delivery. It also has same-day delivery in the San Francisco Bay Area, Seattle-Tacoma, Dallas-Fort Worth, Indianapolis, Baltimore, Boston, Phoenix, San Diego, Philadelphia, Washington DC, Tampa Bay, Atlanta, and New York. Last year, Amazon launched free same-day delivery last year in 14 metropolitan cities the US, beginning with California cities, in addition to free same-day delivery in Orlando and Chicago.
The e-retailer is creating much distance between itself and its’ competitors. From starting to open store locations to pursuing more Prime members, Amazon is a fast moving train, even with stepping into direct competition with UPS and FedEx. The retail leader is planning to develop a global delivery network, beginning in China. Online package deliveries is big for Amazon also and China’s e-commerce is expected to reach $1 trillion by 2020, meeting the demand of 900 million shoppers. A global delivery network will result in customers not having to choose UPS, FedEx, DHL, and others for shipping. They will be able to ship directly via Amazon.com.
UPS has some ground work to do in order to not only implement same-day delivery, but to do it effectively. Either way, same-day delivery is growing at a rapid pace and shows no signs of slowing down. Google, Macy’s, Kohl’s, BestBuy, and more are all on board with the service, and it is changing the way we do business. 1-800 Courier is a Nationwide Same-Day Courier that retailers and delivery companies can partner with to establish optimal same-day solutions. The Chicago Courier has the courier expertise and technology to help capture business in today’s e-commerce market.
Reference: 2.22.16, businessinsider.com, Nick Carey/Mari Saito, With Deliv investment, UPS hopes to study same-day delivery market
