The Large Parcel Last Mile Keeps Growing

January 9, 2019


We’ve written several blog posts and articles as well as commented in the press on the growth of large parcels. FedEx and UPS small parcel facilities and networks are not designed for these types of parcels and both companies have been vocal about this topic to the point of implementing hefty fees to discourage them.

As our rate increase guide notes, in 2018 alone, UPS has increased these surcharges six different times. In addition, as part of its holiday peak season surcharges, additional surcharges were temporarily added to large items. For 2019, the Large Package Surcharge for U.S. Domestic commercial packages will increase by $15.00 while the Large Package Surcharge for U.S. Domestic residential packages will increase $25.00. Meanwhile, Overmax and Oversize fees will increase significantly. The Over Maximum Limits charge will increase $200.00 and the Oversize Pallet Handling Surcharge will increase $200.00.

FedEx has also raised Oversize charges in an attempt to better manage its network. The 2019 rate is increasing 12.5% to $90.00 and since 2016, Oversize charges have increased 33.33%.

Instead, and rightfully so, large parcels belong in less-than-truckload (LTL) networks.

It’s an interesting dynamic as more LTL providers move into the last mile delivery space. This week, J.B. Hunt further expanded its last mile reach and capabilities by acquiring Cory 1st Choice Home Delivery for $100 million. This follows Hunt’s 2017 acquisition of Special Logistics Dedicated LLC.

Cory brings to J.B. Hunt 14 warehouses and other customer-owned facilities. Cory also utilizes more than 1,000 independent contractors, carriers and delivery drivers to complete over 2 million annual deliveries. With the acquisition, J.B. Hunt’s Final Mile will increase to 100 locations and over 3.1 million square feet of warehouse and facilities space.

The WSJ notes in its article concerning J.B. Hunt’s latest acquisition that trucking and logistics provider Averitt Express expanded its supply chain service offerings with the introduction of Averitt Distribution and Fulfillment.

According to Wayne Spain, Averitt’s president and chief operating officer, “The launch of Averitt Distribution and Fulfillment comes at a time in our industry when shippers are increasingly seeking to place inventory closer to key markets and online shopping continues to drive up the demand for order fulfillment services.”

Indeed, according to Averitt’s press release, it has opened of its first branded distribution and fulfillment center in Nashville. The 93,000 sq. foot-facility serves several shipping needs, including import and export management, online order fulfillment, pick and pack, small parcel and white glove delivery.

Competition in the LTL last mile delivery space is growing and providing customers with a number of options to select. The best, much like when managing small package contracts, often depends on your unique needs and budget.

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The Large Parcel Last Mile Keeps Growing

January 9, 2019


We’ve written several blog posts and articles as well as commented in the press on the growth of large parcels. FedEx and UPS small parcel facilities and networks are not designed for these types of parcels and both companies have been vocal about this topic to the point of implementing hefty fees to discourage them. As our rate increase guide notes, in 2018 alone, UPS has increased these surcharges six different times. In addition, as part of its holiday peak season surcharges, additional surcharges were temporarily added to large items. For 2019, the Large Package Surcharge for U.S. Domestic commercial packages will increase by $15.00 while the Large Package Surcharge for U.S. Domestic residential packages will increase $25.00. Meanwhile, Overmax and Oversize fees will increase significantly. The Over Maximum Limits charge will increase $200.00 and the Oversize Pallet Handling Surcharge will increase $200.00. FedEx has also raised Oversize charges in an attempt to better manage its network. The 2019 rate is increasing 12.5% to $90.00 and since 2016, Oversize charges have increased 33.33%. Instead, and rightfully so, large parcels belong in less-than-truckload (LTL) networks. It’s an interesting dynamic as more LTL providers move into the last mile delivery space. This week, J.B. Hunt further expanded its last mile reach and capabilities by acquiring Cory 1st Choice Home Delivery for $100 million. This follows Hunt’s 2017 acquisition of Special Logistics Dedicated LLC. Cory brings to J.B. Hunt 14 warehouses and other customer-owned facilities. Cory also utilizes more than 1,000 independent contractors, carriers and delivery drivers to complete over 2 million annual deliveries. With the acquisition, J.B. Hunt’s Final Mile will increase to 100 locations and over 3.1 million square feet of warehouse and facilities space. The WSJ notes in its article concerning J.B. Hunt’s latest acquisition that trucking and logistics provider Averitt Express expanded its supply chain service offerings with the introduction of Averitt Distribution and Fulfillment. According to Wayne Spain, Averitt’s president and chief operating officer, “The launch of Averitt Distribution and Fulfillment comes at a time in our industry when shippers are increasingly seeking to place inventory closer to key markets and online shopping continues to drive up the demand for order fulfillment services.” Indeed, according to Averitt’s press release, it has opened of its first branded distribution and fulfillment center in Nashville. The 93,000 sq. foot-facility serves several shipping needs, including import and export management, online order fulfillment, pick and pack, small parcel and white glove delivery. Competition in the LTL last mile delivery space is growing and providing customers with a number of options to select. The best, much like when managing small package contracts, often depends on your unique needs and budget.

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