As online sales continue to soar, so have the expectations of consumers for goods to be delivered quickly and cheaply.
Fueling an increase in on-demand delivery services is Amazon.com, the Seattle-based online bookseller that has over the past two decades morphed into a $100 billion-a-year global storehouse and potentially a provider of logistics services in its own right.
Since 2014, investors have poured more than $1 billion into companies, such as California-based Postmates and Deliv, that use freelance drivers to provide same-day pickup and delivery of merchandise and packages. At the same time, Google and other high-tech firms are developing driverless trucks and robotic delivery vehicles in an effort to lower costs.
Amazon CEO Jeff Bezos has made it clear that he is willing to try innovative ways to speed up deliveries, including the use of drones. The company has established more than 100 regional fulfillment centers and is setting up local hubs to provide one-hour delivery in cities across the United States.
In the 2016 edition of Transport Topics' Top 50 Logistics Companies, Senior Features Writer Daniel P. Bearth explores what the growth of online commerce means to some of the largest logistics service providers in North America, including top-ranked UPS Inc., which has invested in several delivery startups; and FedEx Corp., which last year acquired Genco, a distribution firm that handles order fulfillment and manages returned goods for Internet retailers.
While the companies have made investments to enhance their package delivery networks to handle additional online commerce, they don’t yet see enough demand from consumers to expand same-day or on-demand delivery service.
On the other hand, the beginnings of a new and radically different transportation network appear to be taking shape.
“People are willing to pay for convenience,” Holger Luedorf, senior vice president of Postmates, told Transport Topics. “In two or three years, we expect delivery in one hour to be a very common experience.”
See the entire Top 50 Logistics Companies list here.