At the same time: As retailers beef up their own shipping networks or partner with companies like Instacart and DoorDash that can offer rapid delivery, third-party logistics companies are struggling to keep up.
- Amazon has gained market share to become one of the top shippers in the country: In 2020, Amazon Logistics delivered 21% of all packages in the US, putting it behind only the USPS (38%) and UPS (24%) in terms of package volume, per data from Pitney Bowes.
- FedEx is struggling with late deliveries, disgruntled contractors, and an exodus of talent to Amazon, per Insider. The company has refocused its business to prioritize ecommerce deliveries over commercial ones, but heightened expenses have eaten into profits.
- The USPS is experiencing staffing and funding shortages, leading to delivery delays. But that hasn’t stopped it from launching same- and next-day delivery solutions for business, per Chain Store Age.
The big takeaway: Building a logistics network is expensive, but it’s also a profit opportunity: Retailers can allow other businesses to use their delivery services, thereby offsetting some of the costs.
- Walmart is letting companies tap into its fulfillment services through GoLocal, its delivery as a service business.
- Target’s same-day delivery service, Shipt, has forged partnerships with retailers like Sephora and Walgreens.
- But with more retailers offering fulfillment services, traditional delivery companies are under even greater pressure to provide rapid delivery solutions and improve efficiency.