Parcel consolidator Streamlite ceased all operations today after nearly seven years in business. On its website, the Atlanta-based company posted the message below.
“For nearly seven years, Streamlite has proudly served our customers and consumers with consistent, reliable residential delivery,” the company email read. “Unfortunately, due to the loss of a critical customer, Streamlite, Inc. has ceased doing business, effective June 14, 2012. We appreciate the opportunity to have served you.”
Streamlite’s critical customer was health and beauty merchant CVS Caremark. Streamlite, which specialized in low-cost, trackable delivery of parcels weighing 5 pounds or less, partnered with the U.S. Postal Service for “last mile” delivery.
David Ross, an analyst with financial services firm Stifel Nicolaus, wrote that Streamlite’s customers should find their way into the networks of FedEx SmartPost, DHL Global Mail, and Newgistics. Ross estimated Streamlite recorded annual revenue of $200 million and delivered up to 250,000 packages daily.
Between 20%-50% of the Streamlite business will be picked up by FedEx SmartPost, Ross wrote, “and UPS is less likely to pick up as much volume because the parcel giant lacks a stand-alone consolidator product offering.”
Gerard Hempstead, president of consulting firm Hempstead Consulting, said Streamlite’s closing “makes it hard for a new entrant, except for Amazon, to become a parcel consolidator.”
Hempstead speculated that Streamlite was losing money, investors didn’t want to put in any more of their money, the company couldn’t find a buyer, and it lost its largest customer in CVS Caremark. “I suspect the company ran out of cash and borrowing options. The loss of Caremark had to hurt the P&L beyond any short term fix they could do.”
Rob Martinez, president and CEO of transportation spend management firm Shipware, said the loss of CVS Caremark certainly forced Streamlite’s closing, but “the underlying business metrics were unsustainable in the long term even had Streamlite retained the client. With the loss of their biggest customer, CVS Caremark, we knew they had a tough time selling the business, and would likely be forced to stem losses. Fewer choices in the market are generally bad news for shippers.”