The expected surge in last-mile delivery services poses a significant challenge for the traditional freight hauling sector. Pay increases for local delivery may prove attractive for CDL holders prioritizing more time at home than pulling loads across the country. Given the U.S. already struggles with an estimated workforce shortage of 80,000, OTR truckers could be the clear winners.
“Nowadays, instead of visiting brick-and-mortar stores to make purchases, a large number of people prefer to shop online due to the ease of making purchases and the convenience of at-home shopping,” a report based TechNavio market research reportedly states. “Online shopping also saves time. The online retailing market in North American countries is expected to witness further expansion and investments during the forecast period, thus driving the demand for last-mile delivery services during the forecast period.”
Predictive research indicates last-mile delivery market share is expected to experience a spike upwards of $146.96 billion from 2020 to 2025. And while global expansion has been pegged at a compound annual growth rate of 15.06 percent, North America could see a stunning 39 percent increase. Recent TechNavio information highlighted key stakeholders in the last mile delivery growth sector. Several of the organizations are well-known freight carriers. These include Deutsche Post DHL Group, DSV Panalpina AS, FedEx Corp., J.B. Hunt Transport Services Inc., Schenker AG, United Parcel Service Inc., United States Postal Service, Werner Enterprises Inc., and XPO Logistics Inc, among others.
Recent reports also highlight retailers engaged in revamping their last-mile delivery logistics. Amazon remains the leading e-commerce operation with competitors such as Walmart champing at the bit to grow online sales. Now, outfits such as Walgreens, 7-Eleven, and Target plan to work with last-mile services from Shipt. And Lowe’s reportedly brokered a deal with Instacart to offer same-day delivery. Although an increased number of companies are throwing their hat into the last-mile services ring, Walmart appears to be the only significant rival to Amazon.
“Over the past year, Walmart has adopted numerous tactics to increase delivery speeds and efficiency as it aims to win back market share from Amazon. Walmart has leveraged its enormous retail footprint as part of its supply chain, enabling it to expand its pickup and delivery capacity by 20 percent in 2021,” an eMarketer report states. “Within its brick-and-mortar locations, the company has set up Market Fulfillment Centers, which allow Walmart to execute orders without affecting store operations, speeding up the time between purchase and delivery. Walmart is also in the process of expanding its InHome service, which delivers items directly into people’s homes, to reach 30 million households in 2022.”
An expanding Walmart may not necessarily be a bad thing for OTR truckers and regional drivers. The big-box retailer generally pays its fleet drivers good salaries and pivoting to last-mile positions may be a reasonable way to scroll back long workweeks away from home. For those who prefer the open road, luring CDL holders to local routes will only drive up the value of OTR truckers.
Sources: prnewswire.com, emarketer.com
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