Home Delivery - The new frontier

Large trucks in your neighborhood?

LTL Companies are looking for first and final mile clients now more than ever before. The explosive growth in online sales and e-commerce companies is raising the bar on LTL companies who service residential customers. 

The Wall Street Journal (WSJ) published a nice piece in their paper last week, It was titled: "E-Commerce Boom Roils Trucking Industry". The article brings to light a new reality, namely that LTL drivers and Courier companies are doing work today that they have not done in the past. And as an industry, we welcome the influx of work. 

 


 

Why the Inefficiency? 

Semi-trucks are often loaded with an array of freight. By definition "LTL" (Less than Truck Load) carries carry mixed freight. This cargo is heading to a multitude of destinations, and the cargo is loaded with that destination in mind and in order of next delivery stop on a route manifest. Routes are optimized with the first stop loaded last, and the last delivery loaded first, doing this steam-lines the delivery process. It allows truck drivers to reach their next destination and only offload the next item off their trucks without the need of having to offload the entire truck at each delivery location. But when the next load to be delivered is a set of chairs, then those chairs must be delivered in turn...even if that means the driver needs to pull into a residential area to make that delivery. 

 

What has changed? 

E-Commerce has changed the way we shop for goods.  More and more tractor trailers are entering residential areas avoiding mailboxes, low hanging trees, and lord forbid, children on bicycles. Let there be no mistake, large packages make the final mile incredibly inefficient. Residential deliveries can take 30 to 40 minutes each. By contrast, small parcel deliveries only take on the average, 4 minutes and business to business deliveries range from 10 to 15 minutes. 

LTL companies are looking for local businesses to support and in many cases take over their home delivery needs. James L. Welch, CEO of YRC Worldwide will be at this years CLDA conference in efforts to round up carriers who can support his home delivery network. E-Commerce has changed the nature and work of large semi truck deliveries. In resent days, drivers are handed manifest that take them straight into residential areas. Drivers are delivering home goods, which sometimes include heavy mirrors, bedroom sets, sofas, chairs, dinning tables, and on occasion, even gun cases.

Big semi-trucks were just not designed to make residential deliveries. They were designed for dock to dock inter-urban deliveries. But UPS and FedEx are raising shipping cost on big and heavy items. So online retailers are asking more and more from their LTL and Courier Service providers. UPS and FedEx realize that large bulky freight doesn't play well with their automated systems. So they've raised shipping cost. UPS raised their cost to $110, and FedEx will follow their steps later on this year. Because of all this, online retailers are switching to big rigs, which cost almost half of what UPS & FedEx charge.