DHL eCommerce Launches Same-Day Service in the U.S.

Going head-to-head with UPS and FedEx which have owned the domestic space, DHL eCommerce, an arm of German logistics giant DHL, is launching a same-day delivery service in eight U.S. cities that some believe will have Amazon as a major client, according to a report in Reuters.

The service, called Parcel Metro, has been tested in Chicago, Los Angeles and New York for the last two years, DHL told Reuters. It is now expanding to Dallas, Atlanta, San Francisco and Washington, D.C. by the end of the year, with more metro coverage planned both here and abroad.

Parcel Metro uses third-party contract couriers and app-based driver pools to deliver orders. Service levels include two-hour delivery, same day and next day, with the possible addition of Saturday delivery. DHL will continue to use the U.S. Postal Service for less urgent ecommerce orders.

This comes a decade after DHL pulled back domestically when its earlier expansion plan failed. The company delivers about 500 million packages here annually, compared to 750 million during the 2017 holiday season alone for UPS. In 2016 DHL said it would invest $137 million in seven new or expanded U.S. ecommerce fulfillment centers.

Many observers believe Amazon’s logistics moves are an effort to make up service shortfalls with UPS and FedEx as its business continues to boom, especially during the holidays. This new DHL eCommerce service is likely another vehicle to make that happen; an analyst pointed out to Reuters that DHL’s U.S. hub is in Cincinnati, near where Amazon is building a new air hub.

“From the Amazon perspective, they utilize a variety of third parties to help with delivery, and I don’t know of any reason why DHL would be excluded,” reasoned Baird analyst Colin Sebastian. “I think their relationship with DHL in Cincinnati is largely sharing ground facilities until Amazon builds its own cargo hub nearby.” Sebastian added he didn’t believe Amazon had started construction there yet.; Amazon would not comment on the project’s status.

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