When big shippers go internal, we develop new delivery networks
As we predicted in our projected trends for 2020, big shippers like Amazon and Walmart are expanding their use for internal logistics. This means they are carrying out more of their own final mile delivery services. These big companies are defying conventional wisdom and are diminishing their need for outsourcing of their delivery. What does this look like, and what does it mean for regional and local delivery companies, like On Time Logistics?
When final mile started to change
We began seeing this last mile trend in 2019, when Walmart announced they would be implementing a program that delivers groceries right to customers refrigerator at home. This completely changed the game for final mile delivery services, and since then we have only seen these companies go more internal.
Amazon vs. Walmart
There has been an ongoing struggle between Amazon and Walmart; Walmart must progress its final mile delivery to keep up in the race with Amazon and its aggressively fast delivery service, Amazon Prime. According to Vox, Prime has more than 150 million members across the globe. Walmart recently announced it would soon be a program called Walmart+, that could in time put them on top. This program would allow for unlimited, same-day delivery of fresh produce and groceries for only $98 a year. They may also offer other perks such as discounts on pharmaceutical products and gas, according to Vox.
What does this mean for small businesses?
We expect that for now, these big shippers are only going to continue to internalize their logistics and the way they do final mile delivery. This will continue to have an effect on existing logistics companies like ours, that have always relied on the big retailers to provide business. We’re already seeing reports of companies closing, but we are also seeing some companies (like ours) finding other customers and creating regional logistics networks for final mile.
As we mentioned in our blog about trends in 2020, we are viewing this as a way for regional companies and small local businesses to network to better together and find new ways to do business.
Amazon Delivery Service Partner
Another option for these businesses is to partner with Amazon as part of their DSP program. This internal program allows people to create a start-up company at a low cost, with access to Amazon’s technology and hands-on training. It gives people a chance to start their own delivery business and hire and lead teams through Amazon.
Whether you are a local delivery service, retailer or business, contact us today and let’s talk about ways we can help each other, and stay in competition with these larger final mile delivery companies!