Many years ago, a new term, called “coopetition,” was created. This term primarily referred to how the private carriers were using the USPS Parcel Select service to do a package’s final-mile delivery, which has been the backbone of the USPS growth in the e-commerce world. However, this is changing at a rapid rate. It is apparent that the third private integrator in the US is about to open shop: enter Shipping with Amazon (SWA). Amazon wants to control the final mile with their own non-asset network. What does this mean for the industry as a whole? I’ll let you decide for yourself, but there is no denying that change is certainly afoot, as evidenced by these recent announcements, which are changing the landscape of the delivery business:
- Stamps.com announces that they are going to discontinue their exclusive sales agreement with the USPS
- FedEx cancels air agreement with Amazon
- FedEx will start seven-day service for ground shipments starting in January 2020
- FedEx announces that they will charge ground rates for 2Day service
- UPS and FedEx will deliver Parcel Select shipments if they have a ground delivery to the same address
- UPS forms partnership with 58 million ShopRunner members
- UPS and FedEx have established fulfillment services for SMBs
- Amazon is offering next-day delivery to 72% of the US
- Wal-Mart is offering free next-day delivery with no membership fee
- DHL eCommerce has announced that they will offer same-day and next-day service in the US
Most of these announcements have happened in the past 60 days. There is clearly a drive to control the entire delivery experience by all of the carriers. Amazon is in the process of building a $1.5 billion “super hub” at the Cincinnati airport; this hub is scheduled to open in 2021. They will also have over 70 wide-bodied aircraft in their network. Despite all these changes and the uncertainty that often accompanies them, it’s important to remember that competition is always good for the consumer. All of the carriers are making significant investments in automating their sort facilities, which will make them more efficient and cost-effective. It looks like in a couple of years, the term “coopetition” will no longer exist, and the new term will be: ”Delivery: First, Fast, and Free (FFF)”.
Michael J. Ryan is the Executive Vice President at Preferred Shipping (www.preferredship.com) and has over 25 years of experience in the parcel industry. He can be reached at 708.224.1498 or email@example.com.
This article originally appeared in the July/August, 2019 issue of PARCEL.