Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The increasingly noisy market for same-day delivery services is about to get noisier.
Perhaps as early as Monday, the U.S. Postal Service (USPS) will roll
out a pilot version of a same-day delivery service, called "Metropost," that covers a 49 square-mile radius in and around
San Francisco. USPS has not confirmed a specific launch date. However, if it begins Monday, it will coincide with
the Post Office's busiest mailing and shipping day of the year.
The market test runs until next December, though USPS Spokesperson John G. Friess said the
quasi-governmental agency will know before then if the project should move beyond the pilot phase
or be consigned to the junk heap. If the fish bite, USPS can apply to the Postal Regulatory Commission—the
federal agency that oversees postal operations—for approval to expand it nationwide.
Due to laws governing a USPS service rollout, annual revenue during the test phase cannot exceed $50 million. USPS'
total annual revenue is approximately $66 billion.
The service has other limitations beyond the revenue ceiling. It can only be tested in one market. No more
than 10 online e-commerce companies can participate. Each participant must have at least 10 physical locations
of some type nationwide, with one or more in the San Francisco area. And at least through the end of the year,
only 200 packages a day can be tendered.
The package restrictions can be lifted if USPS decides to increase its capacity supporting the service, Friess
said. The agency has developed a separate delivery network dedicated to the implementation.
San Francisco was chosen as the test market because it is "densely populated and has a customer base with an
appetite for this type of service," Friess said. He said USPS will announce the initial participant when it rolls
out the service.
Potential users are also under some restrictions. Users must live within the area designated for delivery. Cutoff
times for orders are between 2 and 3 pm, with packages to be picked up after 3 pm and delivered between 4 pm and 8 pm.
Friess said the cutoff times are later than for most same-day transactions, which generally require orders to be placed
before noon to be delivered that day.
Users can request same-day deliveries by utilizing an eligible e-commerce platform to buy merchandise, by
purchasing items at retail locations that are partnering with test participants, or by visiting a test
participant's own website.
Friess said the limitations of the market test do not reflect USPS' "language," but are instead designed to comply
with laws governing a USPS service rollout. USPS has said the pilot period will give it time to determine the service's
viability and to adjust its pricing as market conditions warrant.
Friess would not comment on specific USPS pricing for the service, though he said the agency has created one
pricing scheme for packages under 25 pounds and another for packages weighing more than that. It will then be up
to the participant to determine how it would pass on its shipping costs to the end customer. The maximum weight
that can be shipped under the service is 150 pounds.
Demand for same-day service will be largely influenced by customers' willingness to pay the market price for the
convenience of instant deliveries, or to pay anything at all. Businesses and consumers have been conditioned to receive
free shipping for their online orders, and research has shown that many e-commerce transactions are not consummated if
there is a cost to ship.
BIG POTENTIAL
The USPS rollout comes amid a flurry of activity in a delivery segment that is long on potential
but has a number of question marks attached to it. Because market demand for same-day service has
not been fully vetted, no one knows if there is enough long-term interest to motivate providers to
build or refine supply chain infrastructures, and then charge the premium prices that would
accompany those efforts.
The segment's popularity will be determined by the rapid growth of online transactions. But it's hard
to conceive how small, lightweight items that comprise most online commerce would, even in aggregate, achieve
the necessary shipment density for a same-day service to succeed on a nationwide scale.
No one is even sure about the size of the same-day market. In 2007, when same-day was more of an adjunct to
other delivery services, the market was pegged at $4 billion a year. In 2011, the Messenger Courier Association of
America, which has a keen interest in same-day service since many members operate in highly-congested urban areas
with small geographic footprints, estimated it at $8.5 billion a year.
JUMPING INTO THE POOL
Despite the caveats, the field is getting crowded as retailers, e-tailers, and providers test the waters.
Wal-Mart Stores Inc., the world's largest retailer, is piloting with UPS Supply Chain
Solutions, UPS Inc.'s
supply chain unit, on a program charging customers in northern Virginia, Philadelphia, Minneapolis, and San
Jose/San Francisco a flat fee for same-day deliveries of holiday items. Susan Rosenberg, a UPS spokesperson,
said the company coordinates the dispatch of local couriers in each market to deliver goods from Wal-Mart's
stores to customer destinations.
For its part, Atlanta-based UPS is evaluating a "number of different models" for same-day deliveries to
gauge what the market will bear for what is becoming known as "instant service," Rosenberg said.
FedEx Corp., UPS' chief rival, launched a nationwide same-day service in 1995 that utilized a "next-flight-out" air
service. In 2008, it began offering same-day deliveries on an intra-city basis in 10 markets and expanded it to 20 in
2009. Five of those markets—Chicago, Dallas, Denver, Los Angeles, and Washington, D.C.—have since been integrated into
the local delivery networks of FedEx Office, a FedEx unit that oversees the intra-city service. The remaining 15 markets will
be added over the next two years, according to Carla Boyd, a FedEx spokeswoman.
Boyd said that by leveraging the FedEx Office van networks in each market, FedEx can offer users a two-hour delivery
guarantee from the time the package is picked up at origin.
The growing interest in same-day deliveries is pushing e-tailers and traditional retailers in unusual directions.
Cathy Roberson, a U.S.-based analyst for U.K. research firm Transport
Intelligence, said traditional retailers are starting
to use their stores as de facto distribution centers to fulfill orders and consign them to a local courier for delivery,
sometimes within a couple of hours.
Through this approach, a traditional retailer "may be able to extend same-day delivery hour options" beyond what a
pure e-tailer like Amazon.com can now offer, especially in less densely populated markets, she said.
One example cited by Roberson is online auctioneer's eBay Inc.'s integration of Milo.com, a local shopping engine
acquired by eBay in 2010 for $75 million. Through Milo, eBay takes so-called "brick-and-mortar" inventory from local
stores and pushes it on to the mobile devices of eBay shoppers who've provided e-mail addresses. There, consumers can
order merchandise and have it delivered by local couriers in sometimes under an hour, she said.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”