UPS Package Deliveries Set to Increase for Holidays by 5.7%

During this holiday season, UPS already is showing signs that it will have an increase in sales from this time last year. Internet Retailer reported that end-of-the-year sales are forecasted to increase for UPS between Thanksgiving and December 31. Kathleen Gutmann, senior vice president of worldwide sales and solutions, said during a call on UPS’s third quarter earnings, “The dramatic growth of online shopping and subsequent returns is expected to lift UPS package levels to a record high during this upcoming holiday period. Between Thanksgiving and New Year's Eve 2016, there are two additional operating days and we expect to complete over 700 million deliveries worldwide, about 100 million more than last year.”

For this year's third quarter, the carrier's US average daily package volume increased 5.7% to 15.364 million packages from 14.540 million during the same time in 2015. International package volume also went up by 7.5% to 2.788 million from 2.593 million in 2015. Some other third quarter numbers for UPS included:

• Total revenue rose 4.9% to $14.928 billion from $14.237 billion in the third quarter of 2015.
• U.S. domestic revenue increased 4.8% to $9.289 billion from $8.860 billion.
• U.S. ground shipment revenue grew 4.8% to $6.616 billion from $6.315 billion.
• Next Day Air revenue was up 2.6% to $1.706 billion from $1.662 billion.
• International revenue increased 2.2% to $3.024 billion from $2.959 billion.
• Net income increased 1.0% to $1.270 billion from $1.257 billion.

Also, UPS' My Choice program will be used to help manage the expected holiday volume surges. My Choice gives consumers who sign up the option to choose the delivery location of their package, whether to their home or an alternate delivery site, including a UPS Access Point location. The program currently has 30 million members worldwide, compared with 20 million last year. The growth shows that customers like options, and UPS has about 8,000 Access Point locations in the US, including UPS stores, Access Point “smart" lockers, in addition to sites like convenience stores and dry cleaners.

Chief financial officer Richard Peretz commented on UPS business-to-business sales. He stated, “It's the best growth we've had there in five quarters. Returns growth in e-commerce is also very strong. It's growing in the mid-teens.” Despite lower industrial production, business-to-business grew roughly 2% primarily due to online retail returns. The question will be will UPS be able to keep pace with deliveries and returns in a timely manner.

Returns are not something that shoppers enjoy, nor do retailers like it either. However, with the evolving of warehousing being sourced from actual physical stores instead of traditional warehousing, correcting error shipments can be easily done with Same-Day Delivery. This is just one advantage of the service, which retailers are partnering with a Same-Day Courier like A-1 Express that can quickly pick up and deliver product from nearby stores. The Miami Courier supplies same-day delivery to hundreds of well-known retailers and companies nationwide.

Online retail is not only driving package increases for UPS, but also same-day delivery. During the holiday season, retailers like Amazon, Google, Macy's, Best Buy, Whole Foods, and more are all gearing up to provide a convenient delivery option that shoppers feel is convenient and at low cost.

Reference: 10.27.16, Internet Retailer, Tracy Maple, UPS expects holiday package volume to grow more than 16%

Amazon's Global Acquisitions Mean Bigger Delivery Network

If there's any company that could spearhead and revolutionize where e-commerce is going regarding fast delivery, it would be Amazon. The e-retail leader has made huge strides with same-day delivery, even making it free. Now with Amazon's most recent business move, it is going beyond just free same-day delivery, but much more.

Retail Dive recently released an article discussing how Amazon's recent acquisitions and large asset investments indicate bigger plan for the retailer's future. Amazon has plans to wholly acquire French delivery company Colis Prive. Amazon already owns 25% of the company, therefore, an initiative had already begun with doing business there. In 2014, the retailer also acquired the right to purchase 4.2% of UK delivery company Yodel. Also, it purchased thousands of semitrailers in the US and contracted trucking companies to haul them.

When these types of acquisitions occur, it shows that Amazon could be after a global establishment of itsdelivery system. Since it's global, Amazon needs global delivery system to go right along with it. It is stretching itself to be able to handle delivering the way that Amazon wants to perform its' supply chain and logistics, not being dictating by large carriers' pricing, such as FedEx and UPS. The semitrailer expansion in the US makes sense as well, enabling transporting from its' numerous distribution centers. With 50 fulfillment centers added to its' fire power around the world within the last four years, one can only believe it is duplicating itself worldwide also.

“They have the opportunity to disrupt this market and generate a lot of revenue,” stated Colin Sebastian, Robert W. Baird & Co. analyst, to the Seattle Times. With its' own delivery network for packages, the retailer will begin to give big name carriers a run for their money. Retail Dive mentioned how Amazon will control more of its' fulfillment costs, and as a result, it will begin to generate the savings in this area they are looking for.

Currently in the US, Amazon has been launching same-day delivery in multiple major US cities. Last year, Amazon rolled out free same-day delivery in 14 metropolitan cities the US, beginning with California cities in the Southland, including San Fernando Valley to Irvine, as well as the Redlands and Moreno Valley in the east. The others would be cities such as the San Francisco Bay Area, Baltimore, Boston, Dallas-Fort Worth, Indianapolis, New York, Philadelphia, Phoenix, San Diego, Seattle-Tacoma, Tampa Bay, Atlanta, and Washington DC as well.

Amazon may be seeking after performing its' own deliveries, yet currently it is also utilizing partners to deliver for them in some cities. Other retailers that aren't as robust as Amazon, can also partner with a Same-Day Courier like A-1 Express to help them expand and offer same-day delivery as well. The Miami Courier has a number of retailers that it develops same-day solutions for, as well as quick implementation nationwide.

Reference: 1.12.16, www.retaildive.com, Daphne Howland, Amazon's acquisition of delivery company hints at larger ambitions

Will Retailers Charge For Same-Day Delivery?

It takes a lot of customers to not want same-day delivery to be a good option when they can't get to the store themselves.  The question is when shoppers do pursue to take advantage of the same-day service, do they like what they are being charged for it.  Online retail is forecasted to grow upward to $500 billion by 2018, therefore, shopping online will continue to be a source for revenue for retailers, yet will same-day delivery help make e-commerce more attractive to customers. 

The Denver Post recently discussed how customers like same-day delivery, but don't like paying the cost.  That is similar to any convenient item, such as the ATM, but there is a common need to use them.  Kozmos begin same-day delivery over a decade ago, but didn't have the wide use of technology to help throttle it's idea forward into a greater demand.  "I remember using Kozmo.com a decade ago," said Chicago TV producer C.J. Dugan in the article. "One night we ordered a tub of ice cream and the movie 'Pitch Black.' They showed up in about 30 minutes. ... It was before its time, I guess."  The desire is there for same-day delivery; it is the fee for the service that retailers have to pinpoint that will create the longevity success of it.

If free is what shoppers want, the only retailer coming close to offering free same-day delivery is Amazon.  What first started out in 14 Los Angeles metropolitan cities earlier this year, expanded to Chicago, Orlando and now is in 16 US markets.  "Over the past 18 to 24 months, Amazon has been pushing the bar.  If you're in retail, you have to step up to the new bar," said Daphne Carmeli, CEO of Deliv in the Denver Post article.  Deliv is a crowdsourcing  delivery company that partners with retailers and malls to perform same-day delivery for them.

One of Deliv's biggest partners is Macy's offers same-day delivery is major US cities including Seattle, San Francisco, Los Angeles, San Jose, Houston, Washington DC, Chicago, and New Jersey.  Macy's even has more markets offering the last-mile service than Amazon.  The retailer also has over 800 stores in which they can fulfill online orders from.  This makes Macy's one of th potential retailers that could really out do Amazone with its' same-day delivery models due to its' physical locations.

Macy's offers its' same-day delivery for $5 for orders over $99.  Amazon has been offering same-day delivery free for Prime members, which pay a $99 annual fee.  Shipping industry expert Satish Jindel stated in the report, "Retailers trying to compete with Amazon on the road Amazon created will always be at a disadvantage".  Free service is something that many retailers will have to strive for, in contrast to Amazon which is leading the pack.  Many retailers charge between $5 and $20 for their fast delivery service.

As the holiday season continues, shoppers are going to be given the option to have their online orders delivery same day.  Kohl's, BestBuy, Wal-Mart and more have all jumped into the same-day delivery race.  For retailers that are seeking to implement a fast delivery model, a Same-Day Courier like A-1 Express can partner with them and meet the convenient demand that their shoppers have. The Miami Courier has a nationwide footprint, enabling it to service the largest of retailers and businesses. 

Reference: 11.29.15, www.denverpost.com, Mae Andersen, Everyone loves same-day delivery, until they have to pay

Amazon's First Quarter Revenue Goes Up 23%, Still Will Advance Delivery System

There is one online retailer that has it's grip on the industry, and it doesn't appear it is going to let go any time soon. Amazon is doing many things right and continues to impress experts at how its' branding, marketing and services is right in line with what shoppers want. So far this year, the retail giant has posted excellent results, increasing their revenue to 23%.

Internet Retailer discussed the recent Amazon results, as the retailer seeks to improve every facet of its' business. Its' revenue went up to $19.74 billion this year, which is an increase from 22.8% during the same period in 2013. Within that revenue figure, Amazon's net product sales were $15.70 billion and $4.04 billion originated from outside merchant commissions. Some other notable figures included a net income of $108 million in the first quarter, compared to $82 million last year.

"Based on the recent expansion of Amazon Fresh and the launch of Amazon Dash and Amazon Pantry, it is clear Amazon is increasing its focus on building a more robust consumables business, which we think could have broader implications for traditional hardlines retailers like Wal-Mart, Target and even Costco," stated Wells Fargo Securities analysts in the article. Amazon launched Prime Pantry early this year. The service gives Prime customers a 4-cubic foot box to fill up to 45 pounds of items within Amazon's new pantry section. Customers pay a flat fee of only $5.99.

Amazon Dash is an interesting service device for AmazonFresh customers to use for their grocery shopping. Items can be added to their online shopping list via voice commands or bar code scanning. AmazonFresh, which originated in Seattle, has now spread to a small amount of other US cities and there are more cities to come. Wal-Mart is probably the largest retailer competing with Amazon on this front, as it has launched same-day delivery of groceries in US cities as well.

The retailer does desire to make their delivery network better and better. UPS had a negative impact on Amazon's Christmas season last year and shoppers were not pleased with receiving their packages late. Amazon is not wanting this to happen again, therefore, their delivery system has to be efficient. The report mentioned how Amazon was testing a "last-mile" delivery service, in which it will use its' own trucks and drivers to transport products the final distance to their customer destinations. Experts agree that Amazon is pursuing to have their fulfillment centers as close to metro areas as it can.

Recently, Amazon had a discussion in the Forbes article about revamping their delivery network as well, which is what the company expressed it is going to do this year. It did tackle the idea of utilizing a same-day courier to accomplish their same-day delivery initiatives. A same-day courier like A-1 Express has a national footprint to match such a robust online retailer like Amazon. The Miami Courier can optimally perform "last mile" deliveries, even redeliveries and returns. The courier can transport various products, even groceries, within hours. This is what Amazon is looking for, especially with AmazonFresh.

Reference: 4.24.14, Internet Retailer, Thad Reuter, Amazon's revenue increases nearly 23% in Q1

Sears Competes With Amazon With Fulfilled By Sears Program, Can Use Same-Day Courier

Many retailers are making changes in the way they do business, especially with the emergence of e-commerce and mobile retail. Order fulfillment initiatives are being sought after to meet the high online demand, not only from customers, but also between retailers. Sears is one example of a retailer rolling out a program that will meet the retailer order fulfillment demands and it just might work.

Internet Retailer reported that Sears Holdings will be launching Fulfilled By Sears Program. The program is designed to offer online and offline fulfillment services to other retailers in the US. It is going to be available to retailers who sell via Sears.com. “We have the ability to ship orders much faster and more cost-effectively than other sellers do based on our national footprint of stores and warehouses,” said Corporate Executive Vice President Imran Jooma. The Fulfilled By Sears is going to be a great move for Sears to increase their sales, as they take on expanding into warehousing services.

The new program will offer a pay-as-you-go service for all their retailers. This type of service will allow retailers to incur no fees unless they are storing product in the warehouse facilities. There will also be fees that will slightly differ for merchants that sell on Sears.com, from those that process orders outside of Sears.com. Both will have fees ranging from 45 cents to 60 cents per cubic foot. Merchants will enjoy a $1 per item pick and pack fee. However, outside client retailers will pay a $3 pick and pack fee. Merchants will pay a $39.99 monthly Sell on Sears plus sales commission to Fulfilled By Sears.

Fulfilled By Sears will provide shipping for their retailers as well. There will be an order-handling fee of $1.50 for ground, $7.50 for two-day shipments, and from 45 cents to $1.90 for next-day shipments. The higher fee for two-day shipments will be due for any air shipments retailers require for their order fulfillment. Their client retailers will have to handle having their product shipped to the Sears' fulfillment center.

Most notably about Fulfilled By Sears is it will be in competition against online giant, Amazon, which provides the same type of fulfillment services for their client retailers. Amazon has built distribution centers throughout the US and is set to roll out more this year. Many experts believe Amazon is gearing up to one day provide same-day delivery to its' customers in areas where it makes sense to do so nationwide.

Same-day couriers like A-1 Express can assist Fulfilled By Sears and its' retailers create a courier logistics solution. Whether is same-day shipping locally or long distances, the Miami Courier is able to pick up anything from small packages to palletized freight and deliver any distance from any fulfillment center throughout the US. A-1 Express is a viable partner for just-in-time inventory in local brick-and-mortar stores and can offer superior product return order fulfillment programs as well.

Reference: 3.22.13, Internet Retailer, Paul Demery, Sears rolls out the Fulfilled by Sears program for other retailers