UPS to pilot same-day delivery

US media reports that UPS is moving into same-day delivery. The pilots are to assess how a same-day delivery model could work for the logistics giant.

UPS main US rival FedEx has already made the move, and is piloting the use of automated delivery robots to deliver groceries to homes.

“We don’t have a same-day product today, as you know, and so we’re looking at it. We don’t have this all figured out, but we’ve got a team of people looking at it,” Chief Executive Carol Tomé said citing her response to a question on an investor-day webcast earlier this week.

UPS was asked for formal comment on the reports of the plans to pilot same-day delivery but other than Tomé’s comment the company refused to elaborate further, stating that it doesn’t comment on its pilot programmes.

The same-day delivery market has boomed since the start of the global pandemic in 2020, and is a fiercely competitive market already.

Current competitive pressures have moved from within-the-day to within-the-hour and within-the-half-hour delivery in some cases. Established same-day players are setting up major infrastructure to make this possible including networks of dark store micro-fulfilment centres in localities. This requires a lot of investment and with big competition between well-funded players, it remains to be seen how things work out for all those involved.

As such, to be successful, UPS will have to put in a lot of resources in what amounts to be a completely new business venture while it already does extremely well in the segments it has come to dominate worldwide.