J.B. Hunt Transport Services Inc. has assembled a large fleet and driver contractor network to provide dedicated final-mile services for U.S. retailers on a nationwide scale, a move designed to pose a significant challenge to XPO Logistics Inc. and other companies in the national last-mile segment.
For 10 years, Lowell, Ark.-based Hunt, using its own trucks and drivers, has offered last-mile deliveries by commingling manufacturer shipments staged in warehouses operated by Whirlpool Corp., the Benton Harbor, Mich.-based appliance giant that was the service's launch customer and remains its largest user. Last March, Hunt began a final-mile delivery program dedicated to four large retailers—whom Hunt wouldn't identify—covering 15 high-density markets. The program's success convinced Hunt executives to expand it nationally during the first half of 2018, according to a company source.
The new service will utilize thousands of box trucks that will not be painted with logos. The drivers, who will all be independent contractors, will offer a broad range of final-mile delivery and installation services, the source said. Orders will be picked up either at a local retail outlet or at a centralized warehouse, depending on the size and characteristics of the market, the source said. Drivers of box trucks often don't require a commercial driver's license (CDL) to operate.
The service is designed for retailers with shipment densities large enough to justify dedicated carrier support. The original last-mile operation, which continues to operate, focuses on smaller customers with less scale and density.
Greenwich, Conn.-based XPO vaulted to prominence in the last-mile market more than four years ago when it acquired Marietta, Ga.-based 3PD Inc., at the time the largest non-asset-based provider of last-mile delivery services. Over time, XPO has refined and expanded its last-mile operations, and plans to double its last-mile network to 85 service hubs by the end of this year.
Some experts predict significant demand for heavier, non-parcel shipment deliveries ordered online as manufacturers and retailers make more inventory available on the web. As of mid-2017, U.S. online sales of non-conveyable goods hit $30 billion, which would have been equal to about 10 percent of total e-commerce sales at the time, according to Omaha, Neb.-based truckload and logistics company Werner Enterprises, which launched a last-mile service in May. For-hire last-mile deliveries of heavy goods ordered online have grown at a nearly 9-percent compound annual rate since 2012 and are now a $7.6 billion-a-year business, said consultancy SJ Consulting in mid-2017.
Truckload and less-than-truckload (LTL) carriers have said they will expand into last-mile heavy-goods deliveries in lanes with sufficient density.