The e-commerce landscape in the United States is continuously evolving, requiring retailers remain flexible and adaptable to maintain a competitive edge. Recent data from Statista projects that e-commerce revenue will reach $1.2 trillion in 2024, an increase of +14.8% from the previous year. This substantial growth implies that e-commerce companies may encounter increased competition for space with major shippers.
Additionally, increasing consumer expectations for fast and reliable deliveries are placing additional pressure on e-commerce companies to find new solutions. To meet these demands, companies are expanding their logistics strategies by utilizing an expanded network of delivery carriers and strategically leveraging unique small parcel delivery options. By diversifying their shipping options, companies may mitigate risk and reduce costs.
As e-commerce sales increase, one might anticipate so do the quantity of small parcel shipments. According to Pitney Bowes’ recent Shipping Index forecast, parcel volumes in the U.S. are projected to reach 23 billion pieces by 2025, and 35 billion parcels per year by 2029. The report also notes that four carriers handle the large majority of these shipments, with two of the largest carriers dominating last-mile deliveries for small parcels. However, this dominance may also bring risks of delays or service disruptions.
To enhance reliability, reduce costs, and improve scalability, e-commerce companies should consider diversifying their networks rather than relying on one or two major parcel carriers. Traditional parcel carriers frequently impose a variety of surcharges and accessorial fees, such as residential surcharges, oversized package fees, and charges for deliveries in remote locations or outside their primary network. Consequently, over-reliance on a single traditional carrier can lead to higher costs due to these additional fees. By incorporating alternative delivery carriers into their mix, companies may be better positioned to mitigate these costs.
Small parcel options from airplanes to zone skipping
Alternative delivery networks can include regional carriers, freight forwarders, courier services and other niche carriers.
When evaluating options for small parcel delivery, two choices for the middle-mile segment of the journey include freight forwarders and alternative parcel carriers. The first option is to use a freight forwarder, which relies on partnerships and agreements with airlines to deliver small parcels to customers’ doors.
The second option is to use middle-mile delivery services of an alternative small parcel carrier, like Delta Cargo’s DeliverDirect solution. DeliverDirect is an end-to-end small parcel transportation service offered by Delta Cargo. From initial warehouse pickup to middle-middle transportation utilizing existing space in the belly of Delta Air Lines’ passenger aircraft, to delivery at the end consumer’s doorstep, the DeliverDirect solution provides a comprehensive door-to-door delivery service for the U.S. market.
The primary advantage of utilizing passenger airlines for e-commerce lies in the speed of delivery. Passenger airlines have a vast and frequent network, covering major cities and regions across the globe. This extensive coverage enables e-commerce products to be shipped rapidly to a wide range of destinations. For businesses, especially those dealing in time-sensitive goods, this means being able to deliver products to customers at an unprecedented pace.
Alternative delivery networks: More speed for less cost
One important feature that alternative carrier Delta Cargo’s DeliverDirect solution offers is zone skipping.
Zone skipping reduces transit times and costs by bypassing intermediate shipping zones commonly used by many large carriers in the U.S. With traditional carriers, parcel freight is initially consolidated based on its regional destination. Upon reaching a hub, it must then be transferred to the spoke before reaching its final destination. This process adds complexity and may increase the cost for shippers in larger zones.
Alternative carrier solutions like Delta Cargo’s DeliverDirect bypass traditional shipping zones by utilizing space on Delta’s passenger aircraft to ship directly to targeted regions before being delivered to the customer’s final destination. This more direct shipping method avoids traditional accessorial fees often associated with traditional ground carriers who use zone-based pricing structures.
The DeliverDirect solution provides access to Delta’s 2,500+ daily domestic flights, eliminating the need for regional zones and significantly reducing warehouse and distribution center expenses. By minimizing infrastructure requirements and optimizing logistics, DeliverDirect offers an appealing alternative for companies aiming to improve their financial performance and enhance customer satisfaction.
Thinking outside the box
As the U.S. e-commerce market continues to grow, reevaluating traditional delivery methods is crucial for staying competitive in a shifting consumer landscape.
Higher costs can pose significant challenges for e-commerce retailers relying on traditional major parcel carriers. Expanding the network of existing delivery carriers to include alternative delivery networks may be an attractive option for these e-commerce retailers, particularly for routes beyond the reach of traditional ground-based parcel carriers. Alternative delivery carriers such as Delta Cargo, through its DeliverDirect solution, also offer the distinct advantage of utilizing existing space on passenger aircraft for middle-mile delivery, in addition to partnering with traditional ground-based parcel carriers for first and last mile services.
By diversifying their carriers and delivery networks, e-commerce companies can stay competitive in the fulfillment and delivery logistics space.
Optimize your logistics strategy, reduce expenses, and enhance customer satisfaction by partnering with Delta Cargo DeliverDirect.
To learn more, visit deliverdirect.com.