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Can couriers capture more “business-to-retail” logistics?

Messenger Courier Association of America’s (MCAA) Annual conference in San Francisco on September 3-15 promises to introduce some intriguing ideas about “last mile delivery.”
By Patrick Burnson, Executive Editor
August 24, 2012

Messenger Courier Association of America’s (MCAA) Annual conference in San Francisco on September 13-15 promises to introduce some intriguing ideas about “last mile delivery.”

According to MCAA executive director, Robert L. DeCaprio,  there’s been considerable speculation on the vulnerability of transport giants FedEx and UPS in the “same day” niche.

“We have been hearing rumors about major retailers seeking to build deals with Amazon to use couriers for this delivery,” he said. “If that’s the case, it would be a major opportunity for our constituents.”

Not sure of the Craigslist context-who was the analyst, and what did they say?

Industry analyst, Doug Caldwell, VP EMEA, at AMFS, told LM that Amazon is seeking to get packages delivered faster, cheaper and more accurately, and they are making major inroads in all three areas.

“The single biggest issue facing B2C shippers is the hand off between carrier and customer,” he said.  “For instance, the carrier says that they left the package on the front porch, but the customer says they never received it. Or the carrier leaves a delivery notice, which is a hassle for both the customer and the carrier.”

Caldwell said that In the U.S., Amazon is testing parcel lockers in a number of cities. These lockers are very popular in Europe. In the UK, Amazon is testing “CollectPlus”, which is a joint venture between Liverpool based parcel carrier Yodel (formerly Home Delivery Network) and PayPoint.

“There are currently 4,500 Collect Plus shops in the UK. Many of them are located at gas stations and convenience stores.”

This lowers the cost of “Last Mile” delivery for both Yodel and Amazon, virtually eliminates claims of non-receipt, and the customer often receives their package a day or more sooner, explained Caldwell.

“CollectPlus shops can also be used to send Amazon shipments at a very reasonable cost. Customers can also easily return items at the CollectPlus shops,” he said.

Yodel currently handles a very large number of Amazon deliveries in the UK through so called “lifestyle couriers”. Earlier this year, Yodel announced that they were going to six day per week delivery instead of five day. During peak season, Yodel will go to seven-day delivery.

“Amazon is also using various local courier companies for same day delivery in the U.S., as well as regional carriers, such as California based On Trac,” said Caldwell.

Also worth noting, he said, was that UPS purchased Amsterdam based Kiala earlier this year. Kiala sets up “Kiala Points,” which are similar to the Collect Plus shops in the UK.

“I spend part of my time in Amsterdam, and there are four different Kiala Point shops within a two block radius of my apartment,” said Caldwell. “The packages are delivered to the parcel shops very early in the morning, before traffic gets heavy. In many cases, customers pick up their packages on the way to work. So even UPS is acknowledging that alternate delivery is a big part of the future of B2C. UPS is now referring to this as ‘B2R’ – Business to Retail.”

Jerry Hempstead, principal of Hempstead Consulting, who will be presenting a the MCAA conference, told LM that shippers shoud keep in mind that UPS and Fedex are major suppliers of service to Amazon.

“This may not be a threat to them,” he said. It could have a greater impact on to United States Postal Service revenue.”

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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