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Direct-to-Consumer Parcel Delivery Shifts Into High Gear

Where did all these parcel delivery vehicles come from? From UPS and FedEx trucks to specialty vans, from UberRUSH to USPS Sunday delivery, in cars or on scooters or bikes, all kinds of packages and parcels are being delivered to destinations near and far in markets large and small.

Growth in online sales is the main driver behind the huge increase in direct-to-consumer delivery, but it’s not the only factor. Not only has shopping shifted from stores and catalogs to websites, blogs and other online sources, we are seeing a concurrent, unprecedented change in consumer buying behavior: Shoppers regularly purchase all kinds of everyday items online – from household cleaning supplies to electronics, snack foods and groceries to cosmetics, hardware and software to workout wear – that would not have been available for home delivery just a few years ago.

Think about it: even as recently as 2010, if you wanted to buy cat food and dog biscuits for delivery to your home address, you would probably find yourself out of luck. Now, home delivery of these types of mundane purchases is common. For example, online spending on pet supplies increased 67% from July 2015 to July 2016, with 57% of that amount spent on pet food and treats.

More than half of U.S. shoppers say they shop online every month. Add in the effects of auto-ship and one-click programs, click-and-collect options, ship-from-store fulfillment, cross-border trade and, of course, returns, and it’s easy to understand why a recent Parcel Shipping Index forecasts annual growth of 5-7% in global shipping volumes, with a cumulative total increase of 20% by 2018.

It’s not just retail consumers who are fueling the direct delivery boom. According to the same index, “Approximately 40% of the U.S. parcel market is made up of … packages and flats shipped by businesses as part of their daily work flow.”

What’s more, both retail and commercial customers expect free (or at least low-cost) shipping and returns and full transparency into shipping charges and delivery options.

Feeling the pressure yet?

In today’s convenience- and cost-driven marketplace, the logistics team has become the pivot point around which retail mechanics revolve. From purchase decisions to order placement to delivery to returns, the best logistics processes can gear up to support an industry already in overdrive. When logistics systems fail, e-commerce grinds to a halt.

Is your logistics machine in top working order?

Companies facing increased parcel volumes need to seek partners with the industry expertise, experience and technology to best manage parcel operations. Transportation Insight optimizes parcel management programs with innovative insights built on unmatched industry expertise. No matter which parcel vehicle is delivering your small packages, maximize service levels with minimal resources by partnering with Transportation Insight.

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