UPS Emerges from Behind the Same Day Eight Ball - Acquires Roadie
Revisiting the Same Day Eight Ball
Well, well, well. We’ve now learned that UPS views same-day deliveries as an important piece of its last-mile delivery puzzle as it scooped up Atlanta-based Roadie on Friday. Roadie is a crowd-sourced, same-day delivery service that UPS Strategic Enterprise Fund invested in five years ago.
Good for them. They apparently seem to understand some of their customers’ needs in this multichannel environment.
We first learned of UPS’ interest in same-day deliveries back in June during the company’s investment analyst conference when UPS executives noted that it had a team analyzing the possibility, including testing various options – in-network and outside of their network.
Back in June, I wrote the following regarding UPS and its same-day tests:
Despite investments in its network, it [UPS] is not set up for same-day deliveries, and given some of the commentaries during the conference; there is little interest to invest further in its network.
For example, the company is expanding its weekend deliveries and will lean on USPS as its Sunday delivery partner via its SurePost delivery option. According to UPS’ CEO, Carol Tome, this will create capacity without capex. But, if a SurePost package and a UPS package are destined to the same location, UPS will intercept and deliver it themselves as they’ve been doing for some time.
This logic will likely be followed if UPS decides to introduce a same-delivery product. It could partner with Roadie, an Atlanta-based crowd-sourced solution that UPS Strategic Enterprise Fund invested in five years ago. It could acquire Roadie or follow a similar path as Walmart and contract with several regional crowd-sourced platforms. However, UPS would need to invest in a tech platform such as Bringg to manage these services.
With this acquisition, UPS is indeed keeping it separate. As noted in its media statement, “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.”
For now.
First off, this is likely a nod towards the union. UPS’ hybrid-USPS SurePost service created an uproar when it was first introduced and then when UPS began to redirect some SurePost volumes back into its own network, there were union rumbles and then when rumors of crowd-sourced deliveries were being used during the holiday season, there were more rumbles.
I’m sure the union has a laundry list of items, including this acquisition, it plans to discuss with UPS when its contract comes up for renewal in 2023.
Roadie is a technology company and UPS can integrate it within its existing last-mile network if it really wants to and I fully expect them to do this eventually.
So, who exactly is Roadie?
According to the media statement, “UPS customers, including large enterprises, are increasingly looking for local same-day delivery solutions for goods of all types, not traditional packages. 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.”
Roadie delivers items of all sizes, typically up to 50 lbs and yes, that also includes what could be considered a “small parcel” but note the last part of the quote above - “without the packaging required to move through the UPS system.” That’s the important part of this same-day delivery puzzle. Instacart, DoorDash, retailer Target’s same-day delivery subsidiary, Shipt, and other same-day crowd-sourced delivery services deliver items in shopping bags as well - for the purpose of speed.
What about FedEx?
FedEx also offers a same-day delivery service but the difference is that parcels are packaged and labeled in order to move through its system. It has yet to respond to its retail customers’ true need for same-day deliveries. A good read on FedEx’s same-day delivery service can be found in Business Insider by Emma Cosgrove.
However, it is responding to consumers’ returns in a somewhat similar manner through its partnership with Happy Returns. Consumers can return items from participating retailers, unpackaged, to FedEx Stores and Happy Returns will collect them all in canvas bags and handle them at their facilities.
Will FedEx follow UPS by acquiring a crowdsourced, same-day delivery platform is a good question. In my opinion, if one of their focus areas is e-commerce, they will need to address the same-day delivery option better than they have so far.
Retailers have been partnering with numerous same-day providers and they’ll continue to do so until more options become available.
Last-mile options are important from a customer service perspective. Consumers may want to pick up an order from a store one day, and the next day they may want an item delivered to their home either same-day or in two days, depending on the circumstances.
Depending on circumstances, consumers want options and they want to see their options and associated costs when they place an order.
Check plus goes to UPS with this acquisition. While it may not be a big revenue-generating move, UPS is at least listening to its retail customers.
-Cathy
That’s about it for now. Thanks for reading. While I aim for a weekly story, sometimes life gets in the way, so think about subscribing (free) so that you don’t miss anything.
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Conferences:
I’ll be speaking on the importance of linking middle and last miles for efficient and faster last-mile service at Parcel Forum and later in the month, I’ll be speaking (virtually, but live) at LabelMaster’s Dangerous Goods Symposium on the impact of e-commerce on dangerous goods.