I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
It’s hard to believe that it’s already February! So much is going on in the parcel/last mile market and, in particular, at FedEx. FedEx is undergoing a huge cost-cutting plan which is part of the company’s strategy to optimize its supply chain network and processes.
So far, over the past month, FedEx has announced it would cut staff and extend furloughs at its FedEx Freight division. In addition, it is shutting down its SameDay City Service and implementing a rating of its last-mile delivery partners to evaluate them.
But it’s not all doom and gloom at FedEx. FedEx awarded Shippo a first-of-its-kind Platform Account with the carrier, a move that will allow Shippo to offer discounted FedEx shipping services to U.S.-based merchants on its platform. Shippo is the first multicarrier shipper to sign such an agreement with FedEx.
Meanwhile, its biggest competitor, UPS, reported a good Q4 earnings report despite a decline in revenue and average daily volumes. Revenue per piece across most of its services continues to grow as the company focuses on and implements technology in its operations to focus on efficiency.
However, UPS cautioned that this year will be a much different one compared to the past couple of years – slower volume growth and slower revenue gains are anticipated in the midst of a very uncertain market.
Not to mention there’s a Teamsters contract up for renewal in July. Talk about bad timing…just ahead of the holiday peak season, and you better believe FedEx, USPS and other delivery companies are using that in their sales pitches
For shippers, prepare in advance to ensure there will be no disruptions in your last-mile.
While both UPS and FedEx focus on either efficiency gains or cost-cutting measures, the rest of the parcel/last-mile market is witnessing providers expand and introduce new services.
- Walmart, for example, is partnering with Salesforce to provide omnichannel sales services, multichannel fulfillment, local delivery management, and other features designed to create an end-to-end shopping experience for consumers.
- BigCommerce announced in development with Amazon that it has launched the Buy with Prime app for BigCommerce, a new self-service integration for US merchants to enable Buy with Prime on their BigCommerce storefront with no coding required.
- Shipstation announced a new carrier integration with GlobalPost, an international shipping carrier for small and medium-sized businesses.
That’s it for now. Comments are always welcomed. Let me know what I missed. Stay tuned for the next newsletter next week, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.
-Jay