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In the past, delivery services such as FedEx and UPS, and even the U.S. Postal Service (USPS), earned most of their revenue from business customers. These sellers relied on them to deliver packages to their customers, and a gap of five to seven days, between an order and the actual delivery date, was generally accepted and even expected. But no more. Today, the main market for delivery services is consumers, and they have some new and powerful demands that require totally different standards.

In particular, consumers today expect to receive the products that they order online within just a couple of days, at most. The expectation has been reinforced by online retailers’ efforts to compete by ensuring quicker and more convenient delivery (we’re looking at you, Amazon). But providing that added value means that the retailers lean on the delivery services to improve what they offer, so that they can enhance their own offers.

For FedEx, UPS, and the USPS, the competition to offer the best logistics thus is intense and constantly increasing. Local delivery services, even if not conventionally focused on package deliveries, are seeking access to this market too. For example, Uber and Postmates reportedly are looking into how they can leverage their local drivers to get packages from central distribution centers to customers’ doorsteps—the famous and notoriously inefficient “last mile” in any delivery system.

In response, the traditional delivery names have sought to expand their services, including reverse logistics, and then to emphasize those broader capabilities in their marketing communication. For UPS, the introduction of Access Points gives consumers an alternative location where can collect delivered packages (which may help them avoid the risk or theft if they are not home to receive them), as well as accept packages they are shipping back to the retailer for return. For FedEx, which notes that e-commerce–related deliveries account for 20 percent of its sales, marketing communications focus heavily on how it can customize its services to meet people’s needs, as well as the vast scope that its existing logistics network provides. At the USPS, services have expanded, such that it makes deliveries seven days per week, rather than limiting its provision to five business days.

Such offers become especially crucial during holiday seasons, when consumers are buying and sending gifts around the world. But even when they seek to purchase delivery services that cover the globe, the essential factor is still the last mile, because if it isn’t in the ultimate customer’s hands on the date promised, the service has failed.

Discussion Questions:

  1. How have the customers soliciting delivery services changed?
  2. How have the different service providers in the delivery market responded to these changes?

 Source: Zach Schonbrun, “Reminding E-Commerce Customers Who Delivers,” The New York Times, December 10, 2017