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-stock 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. It’s important to understand the market to mitigate costs and improve efficiencies. 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.
- Veho announced a strategic partnership with Flexport. Through this partnership, Flexport’s customers will have access to Veho’s parcel delivery and returns platform, offering next-day and two-day delivery capabilities. Flexport and Veho are also integrating their technology platforms to provide “a single pane of glass for merchants to manage their supply chain, and detailed tracking movements for last-mile deliveries to consumers.”
- Walmart is following Amazon by allowing third-party sellers to use Walmart’s warehousing, delivery and returns services to fill orders placed on platforms beyond Walmart’s website, including Target, Etsy and yes, even Amazon.
- During Target’s Q2 earningscall last month, it credited its sortation centers in reducing its unit delivery costs by 20%. So far this year, Target’s sortation centers have processed 19% more packages compared to the same period 2023. Same-day services now account for more than two-thirds of e-commerce sales, with the biggest contribution coming from Drive Up, which generated sales of more than $2 billion in the second quarter and more than $4 billion so far this year.
Slowing down rural deliveries
- A UPS program is reducing delivery days in rural areas. Through the program, UPS consolidates deliveries in certain ZIP codes in an attempt to increase driver efficiency, adding an additional day in transit for impacted packages. Per Supply Chain Dive, rural areas are typically more expensive for carriers to serve than dense urban areas, with fewer people and businesses to deliver packages to.
- Meanwhile, USPS is also looking to reduce delivery days in rural areas. According to the USPS, this strategy will not only reduce transportation costs and enable earlier mail processing for most mail, but also contributes to reduced carbon emissions and truck trips through American neighborhoods. It also estimates that it will reduce costs by approximately $3 billion annually.
Surcharge Updates
- FedEx announced fuel surcharge increases for FedEx Ground, FedEx Home Delivery, and FedEx International Ground services effective Sept 2.
- UPS announced fuel surcharge increases for UPS Ground Domestic and UPS SurePost, UPS domestic Air, UPS International Ground Export Import and UPS International Air-Export and International Air-Import effective Aug 26.
With that, that’s it for now. Comments are always welcome. Reach out if you’d like to learn how to lower or even possibly eliminate any parcel fees. Stay tuned for the next newsletter on Sept 4. Don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices. In addition, if you like what you’re reading, sign up to receive additional insights and analysis via emails twice a month – DM me for more info.
-Jay