While UPS buys its way into last mile and on-demand delivery with Roadie, the U.S. Postal Service is piloting a same/next-day delivery service in Texas, geared toward local business-to-consumer orders that companies bring to a local USPS office to get a discounted rate. Experts questioned its value and market relevance.
UPS announced it was acquiring last mile platform Roadie for an undisclosed sum, thrusting it front and center into a space that has spiked in the pandemic era, providing a way to service demand that doesn’t fit into its existing network, including groceries and bulky items. The deal is expected to close in the fourth quarter.
Now that we’re looking toward a fast-approaching peak and 2022, what has changed about last mile constraints, and how can supply chains retain a competitive advantage through last mile operations? Here are some thoughts, looking at the issue through the lens of spend management, cost to serve and capacity constraints.
For the logistics industry, historically heavily reliant on a checks and cash economic system, converting to consumer-like electronic payments similar to Venmo or Paypal was fast-tracked for many out of a necessity to limit exposure to the coronavirus. It also proved to be a revelation of unrealized, long-lasting advantages.
UPS has ended a freeze on earned discount tiers based on large shipping volume drops caused by COVID-19 lockdowns, with some shippers seeing cost increases in the 10% to 30% range as they suddenly dropped two or three tiers, consultants and shippers report. The freeze ended as the lockdown effects are long over.