Unlike some rivals, DHL eCommerce Solutions has no desire to get into the home delivery of bulky items like exercise equipment, white goods or furniture.
Craig Morris, vice-president product management, said his firm had no ambitions in that arena.
“We’re very explicit about our niche, which is lightweight e-commerce,” he exxplained. “We’re not interested in going toe to toe with companies that do home deliveries of heavy items.”
He said home delivery of large goods had become a very competitive sector and lightweight shipments had been the fastest-growing niche in the market.
He claimed DHL’s Expedited Max, a day-definite delivery service, had been its fastest-growing product since its launch in 2016 in partnership with the US Postal Service, which covers the final mile, showing triple-digit increases.
FedEx mounted a pilot programme for deliveries of bulky on-line purchases earlier this year in preparation for a roll-out in the US market. It also moved to establish special facilities in its network to handle this traffic. The first of these went live in Savannah.
UPS has yet to confirm its plans for this segment, but reports surfaced in the summer that management was seriously looking at the home delivery of bulky on-line purchases like home exercise equipment, TVs and furniture.
The segment looks tempting, with revenues of $13bn in the US. Moreover, this traffic grew 18% last year, outpacing general e-commerce at 15%.
Dean Maciuba, director of consulting services at Logistics Trends & Insights, said the two large US integrators were playing catch-up on a lucrative segment that they had previously kept at arm’s length with hefty surcharges.
The operational characteristics certainly run counter to a rapid distribution of parcels. Besides taking up disproportionately large space on delivery vehicles and requiring two employees for delivery, these goods cannot be left at the door and may also require a time-consuming assembly service. Moreover, returns are expensive.
DHL eCommerce Solutions is intent on steering clear of these issues, said Mr Morris. Nor is it looking at setting up a network of access points in the US market, a strategy both FedEx and UPS are pursuing.
“We use drop points in other parts of the world, in Europe in particular, but we have no plans to roll this out in this market,” said Lee Spratt, Americas CEO of DHL eCommerce Solutions.
DHL eCommerce Solutions uses the USPS for domestic deliveries, feeding its traffic to the postal operator as close as possible to final destination.
“We inject shipments into over 10,000 USPS locations every day,” Mr Morris said.
The company is bracing itself for a lively peak season.
“We’re planning on record volumes again,” Mr Spratt said. This year the season is tighter, with six fewer days between Thanksgiving and Christmas than last year, he noted.
“The biggest challenge for us is the labour situation in the US,” he said, pointing to an unemployment rate of 3.5%.
“We’ll hire 1,200 additional workers,” he said, adding that ongoing automation of the company’s operations as well as increased use of digitisation and data analytics among its clientele would help cope with peak surges.