Portland SEO's Augusto Beato expects the e-commerce market for moving heavy goods on the last mile sector will immensely grow and attract more players.
He was reacting to news that FedEx Freight, the less-than-truckload (LTL) subsidiary of Memphis-based transportation and logistics titan FedEx, is testing full-service residential delivery of bulky products that have been traditionally handled by motor carriers rather than couriers and integrators.
"The growth comes as consumers ramp up online ordering of oversized goods such as fitness equipment, home appliances, and furniture, notes Beato, who is the CEO of Portland SEO. "People increasingly want those big items assembled at delivery."
While larger items tend to not fit well in couriers and integrators sorting operations, FedEx couldn't ignore the revenue potential of this $9 billion market, Beato added.
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In this pilot program, FedEx Freight will be moving large items and sectional sofa into a customer’s home and assembling them, too.
The entrance into the last-mile market by FedEx is not unique, in that many of its primary competitors have already taken the step, with some having a major foothold established. These companies include XPO Logistics, Ryder System, and J.B. Hunt, among others.
Earlier this year, J.B. Hunt Transport Inc., a J.B. Hunt subsidiary, entered into a definitive agreement to acquire New Jersey-based Cory’s First Choice Home Delivery, which provides home delivery services of big and bulky products in the continental United States using 14 warehouses and other customer-owned facilities. The company utilizes more than 1,000 independent contractors, carriers and delivery drivers to complete more than 2 million annual deliveries.
And Ryder announced last October that it formally expanded its Ryder Last Mile service, which is a home delivery and white glove installation offering for big and bulky goods in 11 North American markets.
"The last mile delivery involves transportation of goods in multiple routes and takes a major share in the overall delivery cost, but the business opportunities are boundless," Beato pointed out.
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