The majority of retail and logistics analysts and reporters continue to focus on last mile delivery in their reports and articles. For example, Amazon has relaunched Amazon Shipping, a program that competes with UPS and FedEx. I understand the interest in the program. However, adding Amazon into the mix of delivery providers doesn’t fundamentally change the last mile delivery industry.
Many analysts and reporters recently wrote articles related to the collapse of the oldest Less-Than-Truckload (LTL) carrier, Yellow. Yellow going out of business wasn’t a surprise to me and most people familiar with the LTL industry. In fact, nothing will change in the LTL industry with Yellow out business.
Two industries – last mile delivery and LTL – continue to operate with few changes and minimal disruption. Most people consider this a good thing. I don’t. I believe the last mile delivery industry is missing an incredible opportunity to increase market share, revenue, and profits by setting their sights on one goal – breaking the LTL industry.
At a high level, LTL is a method of shipping products that are too big to be shipped through a parcel network, but light enough or small enough that the products don’t require a full 53’ trailer for shipping. Hence the term ‘Less-Than-Truckload.’
See the Comments section for links explaining LTL.
Last mile delivery companies like OneRail, DoorDash, Shipt, Uber, AxleHire, Capstone Logistics, LLC, Bringg, and so on, remain focused on delivering parcel packages to customers. With a few exceptions, most last mile delivery providers avoid all freight that is palletized as they don’t have the equipment to manage the deliveries. LTL carriers ship and deliver palletized freight.
Several leading last mile delivery companies, however, manage deliveries for large retailers that also have significant LTL volumes; Lowe’s Companies, Inc. which is serviced by OneRail and The Home Depot, which has partnered with Walmart GoLocal, for example. OneRail and Walmart GoLocal focus on last mile deliveries, and the LTL carriers focus on their deliveries. Nothing changes.
I strongly advise the CEOs of last mile delivery companies to answer these questions:
1️⃣ How do we disrupt the LTL industry?
2️⃣ How do we become a strategic partner to our customers that have LTL freight by providing a better and cheaper alternative to LTL?
3️⃣ How do we engineer a better shipping and delivery strategy for all of our customers’ freight?
I can’t stress this point enough – last mile delivery has become a commodity business. It’s a race to the bottom as no one is doing anything innovative, no one is trying to rip apart the status quo. What I suggest, breaking the LTL industry offers exceptional possibilities for those carriers willing to disrupt themselves.