Augusto Beato Expects Package Delivery Firms to Intensely Counter Amazon Threat

Portland SEO's Augusto Beato expects more delivery options via a program similar to FedEx Extra Hours due to the demand trends and consumer expectations in e-commerce. Beato is also expecting UPS and USPS, who have hundreds of thousands of small and mid-sized e-tailers, to come up with similar solutions.

FedEx, UPS and USPS work with e-commerce giant Amazon but are also offering new services to boost its other customers who are competing with Amazon.

The new offering, called FedEx Extra Hours, is a new late-night shipping option for retailers who want to speedily send orders directly to online customers. The program will offer retailers the option to deliver items the next day when they are purchased online as late as midnight.

Through FedEx Extra Hours, retail shippers can broaden evening order cutoff times by up five-to-eight hours, and up to midnight based on a shipper’s current order fulfillment process.

FedEx sees potential profit in the competitive pressure online stores face in keeping up with Amazon’s drive to reduce delivery times on purchases. About half of online purchases occur after 4 p.m., said Brie Carere, FedEx’s chief marketing officer. FedEx’s new extended-hours service seeks to help retailers such as AutoZone Inc. and Best Buy Co. to meet those demands.

Under the program, FedEx Express drivers will pick up packages as late as 2 a.m. from retail stores and take them to sorting hubs. Deliveries can happen as soon as the next day within the local market, and within two days for destinations elsewhere in the U.S.

FedEx Extra Hours aligns with the needs of online shoppers while offering retailers a way to balance inventory and reduce transportation costs.

“By providing later pickup times and utilizing next-day local delivery, retailers can fulfill and deliver online purchases to their shoppers faster than their competition,” a FedEx spokesperson said. “We can pick up trailer-load volumes from distribution centers or smaller volumes from retail stores, all for next-day local delivery, offering retailers a way to balance inventory and reduce transportation costs.”

"It is an example of an innovative e-commerce solution that provides value for its customers who are up against Amazon," said Beato. "It provides great value for online shoppers, as well."

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AutoZone Inc. is already taking advantage of the FedEx service. The retailer of automotive replacement parts and accessories is offering customers next-day delivery of as many as 100,000 items ordered over the internet as late as 10 p.m.

Amazon uses thousands of contractors employed through its Flex delivery program and third-party courier companies it calls delivery service partners, or DSPs. It recently made a push to expand its network of DSPs and has added more than 100 new DSPs across the country within the last six months.

Amazon's growing shipping network has led to speculation that it's trying to compete directly with UPS, FedEx, and USPS.