Brief History of Parcel Logistics
For thousands of years, goods transportation has played an important role in society. In recent times, the improvements in transport systems have revolutionized parcel logistics. Today, computerized software is helping execute deliveries from one part of the world to another, and customers are beginning to receive same-day deliveries.
To understand how we got here, let’s first take a look at the important moments in the history of parcel logistics:
1907: Jim Cassey founds the first large-scale parcel delivery company, American Messenger Company in Seattle, WA.
1919-1930: American Messenger Company expands beyond California, Oakland, and Seattle and adopts the name United Parcel Service, better known as UPS.
1946: An Australian, Ken Thomas, founds K.W Transport in Australia. The company later changes its name to TNT (Thomas Nationwide Transport).
1953: UPS starts air carrier operations for commercial and residential shippers, offering two-day delivery in North America.
1969: Adrian Dalsey, Larry Hillblom, and Robert Lynn found DHL. The company begins by specializing in operating a door-to-door express delivery service, transporting documents faster than freight deliveries.
1973: Frederick W. Smith founds FedEx, which begins operations by delivering 186 packages to 25 cities on its first night.
1977: UPS becomes the first carrier to deliver packages to every U.S state by introducing deliveries to Alaska.
1988: UPS delivers 2.2 billion packages, and sales increase to $11 billion.
1989: UPS is operating in more than 175 countries.
1997: UPS launches online tracking and tracing systems to allow customers to track their packages in real-time.
2005: Amazon revolutionizes the carrier market by introducing Amazon Prime and 2-day delivery.
2016: Amazon expands same-day delivery to 27 metro areas.
Similarly, AI-based logistics solutions are simplifying delivery processes by making it easier to request/schedule deliveries. Shippers can get automated quotes and automatically generate the required paperwork. As eCommerce retailers grow, small parcel companies are offering different types of services to meet the growing needs of their customers.
In this article, we’ll review how same-day delivery fundamentally changes the way carriers and sellers approach parcel logistics.
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How Same-day Delivery is Changing Things Up
In this section, we’ll take a closer look at the opportunities and operational challenges same-day delivery brings for shipping companies and sellers.
1. It combines the convenience of shopping online with the instant gratification of brick-and-mortar stores.
Same-day delivery presents an attractive option, both for the customer and the seller. Customers have the convenience of getting their order almost immediately without going to the store, while sellers eliminate the waiting time associated with online ordering, which has long been a significant disadvantage for eCommerce stores.
Impulse buying is a well-known sales driver for both online and brick-and-mortar stores. It differs from a regular purchase as it doesn’t involve pre-planning. The purpose of an impulse purchase is to appeal to the customer’s sense of instant gratification. eCommerce retailers like Amazon use same-day delivery to evoke the same feeling in the digital world. Consumers place orders with a single click and receive them on the same day.
Businesses in certain markets are increasingly allowing consumers to choose the one-hour or two-hour delivery time slots. Consumers can monitor the movement of the package in real-time using the tracking number until they receive their order.
2. Customers are willing to pay more for same-day delivery.
Speed and reliability should be top priorities for any business looking to achieve customer satisfaction. According to a recent Delivering on Demand: Consumer 2021 Insights Survey, 65% of consumers are willing to pay more for faster deliveries.
This is great news for retailers worried about the high same-day delivery rates of small parcel services like USPS and DHL. Even sellers that don’t offer same-day delivery yet can boost their customer experience by offering fast shipping to impatient buyers with the means to spend more.
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3. Logistics providers are creating same-day delivery solutions.
Parcel delivery services are working on upgrading their last-mile delivery systems to meet the customers’ growing need for same-day delivery. They are attempting to bridge gaps in the ability to offer a wide range of fulfillment options, like the option to pickup orders from retail locations and scheduled delivery (the ability to customize their delivery day and time).
Similarly, parcel logistics services integrate automation and digitization in their supply chain solutions to offer tailored and seamless delivery to both B2B and B2C customers. This allows them to identify economically viable options for delivery for small parcels and LTL deliveries.
4. Same-day delivery can boost online sales.
Despite the exponential growth of eCommerce, online retailers have the opportunity to unlock sales unavailable in brick-and-mortar stores.
Parcel shipping companies are making their logistics processes more flexible to make same-day deliveries affordable for both themselves and their customers. Amazon and other eCommerce retailers have long used same-delivery to boost sales.
5. Its availability in US cities varies based on different factors.
Several factors determine whether a parcel shipping company can offer same-day delivery.
Offering same-day delivery in urban centers is easier and cheaper compared to remote locations. Furthermore, only carriers with established last-mile delivery networks can take on this task.
Secondly, small parcel companies have small one or two-hour windows for same-day deliveries. Therefore, fast and efficient warehousing is crucial if you want to pick, pack, and ship products as soon as you get the customer’s order.
Similarly, finding a delivery company that can pick up and deliver orders multiple times on the same day might be difficult.
6. Shippers can get started on this trend early on.
If you don’t offer same delivery because you consider fast-shipping a luxury activity, know that many customers are beginning to view it as a norm.
Since shipping speed is an important factor that buyers consider when making a purchase decision, it could be the difference between choosing to purchase from your company, or one of your competitors. By catering to the needs of your customers, you’ll not only be able to increase profitability but gain new customers for your business.
Incorporate Next-level Shipping Solutions with Sifted
While same-day delivery offers a number of opportunities, it also brings different logistical and operational challenges for the sellers and shipping companies such as a limited fulfillment window and travel distance from customers. Robust logistics solutions can help overcome these problems by offering faster and cost-effective delivery routes, improved communication, and efficient order tracking.
Sifted understands that fast and reliable shipping is the backbone of eCommerce and many industries. We offer tools for businesses and shippers to model and simulate how their shipping decisions affect their bottom line.
Ready to optimize your parcel logistics costs? Get a free demo from Sifted!