With online shopping becoming more prolific for an array of different categories the trucking industry is reaping the rewards. You can now order everything from a couch to an outdoor kitchen and get it delivered and assembled. Bloomberg has the story.
Wielding a cordless drill, Osborne hooked up all three appliances in about 45 minutes and sped off for the next home. Meanwhile, across the urban sprawl of North Texas, a colleague navigated a sofa bed down a tight hallway while another driver unpacked and assembled a patio table.
The array of cargo would have been rare just a few years ago, when shoppers typically bought big, bulky goods from local shops and department stores with their own delivery services. Now that consumers are more comfortable buying appliances, treadmills and outdoor grills online, national trucking companies are plowing investment into winning the business by displacing or buying up local operators.
The market for so-called last-mile deliveries amounted to $8.9 billion in 2018, up about 10 percent from the previous year, said Satish Jindel, founder of SJ Consulting Group. That’s a much faster growth rate than for regular freight and will continue for several years as young people age, start spending more and buy bigger items, said John Hill, president and chief commercial officer of closely held Pilot Freight Services.
“Millennials buy everything online,” Hill said. “They’re very comfortable making those purchases sight unseen.” Pilot has been expanding its national network, including through the July purchase of a heavy-goods delivery company in the Minneapolis area. The growth is driven by national online merchants, who crave the same uniform service, pricing and tracking options that customers expect with small packages. FedEx Corp. and United Parcel Service Inc., however, would just as soon avoid big items that don’t fit into their small-parcel networks.
BBQGuys.com is an example of one such merchant. The Baton Rouge, Louisiana-based retailer of outdoor kitchen equipment and patio furniture has just a single showroom. But the company ships all over the country, and gets more than 70 percent of its $115 million in annual sales from large items. BBQGuys has tried to offer delivery with installation but has been hampered by inconsistent pricing and uneven service from the various carriers it hired.
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Jeremy Jones, CFA
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