Dive Brief:
- FedEx and UPS are opening numerous large sorting facilities to cut the lag time involved in the first leg of a shipment, reported the Wall Street Journal last week.
- The two parcel shipping companies' ground operations, along with the U.S. Postal Service, have grown exponentially from the upswing in online sales.
- A one-hub option cuts delivery time, increasing speed of delivery, particularly in crowded cities.
Dive Insight:
The steadily increasing number of Americans who rely on e-commerce have made necessary a new paradigm in quick delivery for the two biggest shippers in the country.
Because of the high cost of urban real estate, particularly in the square footage sought, shippers are locating their new, massive warehouses just outside of key cities, providing easy access to delivery teams. For example, UPS is expanding its Jacksonville, Fla. hub to add more than 260,000 square feet to its current site. Further, once completed, capacity will increase by one-third to more than 80,000 packages processed per hour.
As the logistics of shipping evolves to meet consumer demand, more strategic hubs will be required. Whether enormous in size or smaller and urban specific, the growing need for centrality to ease delivery will likely increase.
