Small parcel carriers have been experiencing greater challenges, particularly with last mile delivery. Of course, the greatest changes to the parcel shipping industry were brought about by ecommerce shipping, not the carriers, but UPS, DHL, FedEx, and USPS are the ones working to keep up with the new order of things.

It was once the case that parcel shipping included shipping and handling fees for a traditional week-long shipping window. Today, basic shipping usually lacks these logistics costs, ecommerce retailers usually opting to charge for faster delivery options, instead. Consumers are now paying only when they desire premium services like two, or next-day shipping. The industry has come to accept that shipping and handling is included in the online shopping and ecommerce business.

The Challenge

The key parcel carriers like DHL, FedEx, UPS, and USPS have come to understand that delivery density is the greatest challenge to the last mile of parcel shipping. The industry has started to shift from a business-to-business model to a business-to-consumer one. This trend in ecommerce and parcel shipping has increased drastically in recent times, but it’s been happening slowly for a long time.

The large issue with small parcel shipping and delivery density is that USPS is largely relied upon for residential deliveries. UPS, FedEx, and other carriers have been in the ecommerce shipping industry for a long time, but their networks haven’t yet adapted to this change. Because USPS oversees most residential parcel shipping, and they only make one stop at a residence a day, specific-day delivery demand is straining their abilities.

Most parcel carrier systems aren’t designed around residential delivery, and it’s hurting profit margins. Their attempts to copy USPS and create delivery density with improperly developed systems is what’s wrong with last mile delivery. This is exactly why DHL, FedEx, UPS, and others are putting a lot of effort into improving their logistics network to enhance abilities to reach consumers quickly.

The most likely solution to this parcel shipping and ecommerce delivery issue is to store products near their delivery location. If you don’t have warehousing to store ecommerce inventory near where it’s being shipped, it will be next to impossible to have affordable parcel shipping rates.

The Solution

Logistics providers may be working to increase fast shipping speed with increased density in their service networks, but that doesn’t mean improved ecommerce shipping sales. Parcel carriers need to improve last mile delivery in three ways: convenience, control, and choice for both retailers and consumers to increase parcel shipping and ecommerce sales.

Omnichannel shopping experiences are here, visibility in the supply chain is close, and speed is imperative. Carriers and logistics providers are all moving toward the same solutions, because current consumers all currently demanding the same things.

For instance, FedEx and UPS have started to invest in the same solutions for last mile parcel shipping like drop-off locations where consumers pickup packages at their earliest convenience for a discount by saving on delivery costs and fuel.

DHL and UPS have worked toward the same solution of using bicycle delivery in urban areas, and investing in electric options to save on fuel costs for parcel shipping. In addition to that, these parcel carriers are working with tech partners to develop innovative ways of handling parcel shipping in last mile delivery.

The Future

Most of the ecommerce and parcel shipping industry agrees on the way forward for last mile delivery. It will really come down to technology, flexibility, and scalability, and their investments into it. Flexible and potentially individualized parcel shipping plans and delivery may be the future of the industry.

There’s also the desire to keep the ecommerce retailer’s products nearer to the customer, but doing that without new warehouse construction is a problem that hasn’t been solved yet. This could be where technology takes over for parcel shipping logistics management, but it’s still not clear yet. Ultimately, the parcel shipping industry still isn’t sure where it’s headed, but parcel carriers like UPS, FedEx, DHL, and USPS are searching for ways to make ecommerce shipping as efficient as possible. No matter where it’s headed, the next step will be a big one.

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