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As e-commerce demand continues to explode in both domestic and international markets, major players in the sector are seeing their efforts pay off. In their Q3 reports, e-commerce leviathan Amazon showed impressive growth, far surpassing year-over-year expectations. While this is great news for Amazon, its domination of the e-commerce sector leaves other retailers scrambling for solutions.
With Amazon standing tall in the e-commerce sector, legacy carriers are trying to figure out where they fit in: UPS is announcing new efforts to meet next-day delivery demands and new acquisitions to scratch the consumer itch for effective reverse logistics. In an industry that’s always moving, here are the seven headlines you need to know.
As consumer expectations for fast shipping continue to grow, legacy carriers are turning to innovative solutions. According to reporting from FreightWaves, UPS has announced plans to institute a next-day delivery service to capture, as CEO Carol Tome said in a recent analyst call, “[...] profitable B2B and B2C volume.”
The service, called Hyperlocal, builds on the framework set forth by UPS in a previous attempt to capture next-day delivery volumes. Under the plan, UPS works directly with fulfillment centers to obtain packages ahead of daily presorting processes, ensuring expedited delivery within a local area.
E-commerce giant Amazon reported impressive results for Q3 2023, with significant growth in both revenue and operating income. The growth highlights the impact of recent expansions in both North American and International markets.
“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Andy Jassy, Amazon CEO in an Oct. 26 investor relations release. “The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations and, perhaps most importantly, putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history.
In an attempt to meet customer demand for efficient reverse logistics, parcel giant UPS has announced plans to acquire reverse logistics software and operations company Happy Returns. Through their partnership with Happy Returns, UPS will provide customers with a frictionless, no-box reverse logistics experience for both merchants and customers alike.
“We know that returns have long frustrated shoppers and retailers looking for quick and easy solutions,” UPS CEO Carol B. Tomé said in an Oct 25 press release. “By combining Happy Returns’ easy digital experience and established drop-off points with UPS’s small package network and footprint of close to 5,200 UPS Store locations, box-free, label-free returns will soon be available at more than 12,000 convenient locations in the U.S.”
For UPS, the consequences of their contentious negotiations with the Teamsters appear greater than many in the company first thought. UPS recently informed media outlets that it had recovered only 40% of the 1.5 million daily parcels diverted due to shipper anxiety around a potential teamster strike.
“In response to a query as to whether the pace of diversion may slow down heading into peak season because customers may be reluctant to disrupt their operations during the cycle, Tomé said customers want to return to UPS before the peak because of its “superior service” and that UPS has not incurred any material expense in winning back diverted business,” reports FreightWaves.
In an effort to mitigate the supply chain consequences of the growing conflict between Israel and Hamas, German carrier DHL has announced a new dedicated air charter service between its distribution center in Liege, Belgium, and Tel Aviv, Israel. The service is made daily by a B767-200 freighter with over 40,000 lbs. of belly capacity.
Despite the recent addition of this service, it remains unclear how long DHL will continue to provide transportation along the new route. “Given the very dynamic situation, we cannot currently say how long we will continue to provide this service,” a DHL representative recently told The Loadstar.
UPS is striving to increase delivery density to reduce emissions throughout its parcel operations. By increasing delivery density or the number of deliveries made along each route, UPS hopes to lower emissions associated with vehicle operation in dense urban areas. While the targeted increase from 1.24 to 1.4 deliveries per stop may seem humble, the effects could be significant, according to EVP and Chief Digital and Technology Officer Bala Subramanian, as quoted in Supply Chain Dive: “The goal is, if we do it, it actually has a significant benefit, not only for the company but also for sustainability.”
An Oct. 25 senate hearing focused on the impact of climate change upon the supply chain. The hearing, “Bottlenecks and Backlogs: How Climate Change Threatens Supply Chains,” featured several experts on both supply chain management and the impact of climate change upon global shipping environments.
“Just as the pandemic wreaked havoc throughout our supply chains, climate change is poised to do the same, only likely much more frequently,” Whitehouse said Sen. Sheldon Whitehouse, a Democrat from Rhode Island. “In fact, it has already begun.”
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