UPS is joining FedEx in the rush for 7-day delivery - and it's a sign that both delivery giants are taking Amazon's logistics build-up seriously
- UPS announced on July 23 that the logistics giant will deliver your packages on Sundays starting Jan. 1, 2020.
- FedEx announced seven-day delivery in May.
- Analysts say both delivery companies are under threat by Amazon, which is quickly building its own delivery network.
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Starting in 2020, UPS will deliver packages on Sundays.
The delivery giant made the announcement on July 23 ahead of its latest earnings report. FedEx announced seven-day delivery in May, a service that will also begin in Jan. 2020.
Both moves point to rising consumer expectations for fast, convenient deliveries, and the surge in e-commerce parcels that UPS and FedEx must handle.
It also underlines the threat of Amazon as the retail giant begins to build out its delivery network of planes, trains, trucks, and delivery vans. In April, Amazon said it was investing $800 million into its own delivery network to turn its two-day shipping guarantee for Prime subscribers into one day.
UPS CEO David Abney told Business Insider earlier this year that the company considers Amazon a competitor, as well as a customer. (Some estimate around 10% of UPS' revenue comes from its partnership with Amazon.) FedEx, which dumped the retailer as an air cargo partner in June, highlighted Amazon as a competitor in its most recent annual report.
However, as Amazon continues to in-house its own deliveries and develop a third-party logistics network, FedEx and UPS both have said their companies are focusing on supporting small-and-medium-sized business and other e-commerce upstarts. UPS is also investing heavily into international sectors as well as medical deliveries - particularly its drone delivery network for hospitals in need of quick movements of blood and organ samples.
Increased technology investments (and the USPS) will support seven-day delivery
UPS currently delivers six days a week. The seven-day delivery move will be supported in part by the increased technology investments into the UPS network, Juan Perez, chief information and engineering officer, told Business Insider.
To accommodate the uptick in e-commerce deliveries, UPS has invested heavily into sortation facilities with automated technology. UPS is adding 20 new or retro-fitted automated facilities to its network by the end of 2019, and those facilities will be able to sort an additional 400,000 packages per hour.
Its air cargo sector has also started to gobble up market share in the next-day air delivery industry. Next-day air package volume increased in second quarter of 2019 by 30.3% from the same period in 2018.
The US Postal Service will also support the Sunday delivery service from UPS. CVS Pharmacy, Michaels and Advance Auto Parts are also joining the UPS Access Point network, so customers will be able to pick up or drop off packages at those retail locations.
"We remain the e-commerce shipper of choice, providing unmatched support to meet our customers' needs for premium, quick delivery solutions," Kate Gutmann, UPS Chief Sales and Solutions Officer, said in a company press release.
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