OnTrac's launch of seven-day delivery for most of its network differentiates it from FedEx and UPS in the ground parcel shipping space, but long-term success will hinge on shippers' own capabilities and how much consumers value Saturday and Sunday deliveries.
The service's debut began on Saturday with various omnichannel retailers and direct-to-consumer brands on board, ready to take advantage of faster delivery speeds, OnTrac said in an announcement last week.
"For example, a customer living in New York City places an online order on Tuesday from a retailer that ships from Southern California," the company said. "OnTrac will deliver the customer’s order by Saturday, up to two days faster than the national carriers, who will not deliver the order until Monday."
As OnTrac’s service has expanded into the weekend, competitors FedEx and UPS both remain limited in terms of Sunday delivery. UPS taps the U.S. Postal Service for Sunday deliveries through its SurePost service, and FedEx Ground reduced its Sunday home delivery coverage to focus on densely populated areas last year.
Although FedEx Ground still offers Sunday delivery to 50% of the U.S., its rollback opened the door for OnTrac to launch seven-day delivery as a more enticing service in a crowded parcel delivery market, said Caleb Nelson, chief growth officer at Sifted, which offers logistics optimization software for shippers.
"At a time where everybody's fighting over volume, anything that you can do to differentiate yourself as a market leader in your specific segment, they're going to do," Nelson said. "I think it's a smart thing to do as long as you've got the density to be able to handle it."
For OnTrac, 75% of its network is now offering seven-day delivery. Expanding that to less populated areas will be a challenge, as carriers need enough packages per route to cover the added operating costs tied to extra delivery days. Attracting enough large-scale shippers to fill delivery vans on the weekends is a tall order for carriers in today's soft demand environment.
"I think it's going to be very difficult to consolidate that much density until you see, unfortunately, fewer players in this market," said Vijay Ramachandran, VP of go-to-market enablement and experience at Pitney Bowes.
Shipper limitations complicate adoption
OnTrac said various shippers signed up to secure seven-day delivery capacity ahead of its debut, but weekend services isn’t guaranteed to be a perfect fit for other businesses interested in the service, experts say.
Sunday delivery has value if it can be displayed to a customer as a clear, estimated delivery date, LPF Spend Management founder Nate Skiver said in a LinkedIn post. However, many retailers display delivery estimates in business days rather than calendar days, since not all carriers deliver on the weekends.
"This leaves 7-day Ground residential delivery as a nominal 'surprise and delight' value," instead of a competitive advantage, Skiver said.
Shippers that want to tap into carriers' weekend delivery capabilities should be able to offer live customer support on those days as well, rather than forcing the recipient to wait until Monday for issues to be addressed, Sifted’s Nelson said. They should also consider how many additional orders they would generate by offering weekend delivery, and ask themselves if the demand boost is enough to make the endeavor worthwhile, he added.
"Honestly, if I was a shipper, that'd be kind of a hard question to answer," Nelson said.
Are consumers on board for weekend delivery?
Whether weekend delivery will generate more demand for OnTrac shippers remains to be seen. In a Pitney Bowes survey of 2,094 U.S. consumers in July 2022, 41% of respondents said being able to get packages delivered on Sundays is important.
Additionally, only 21% of consumers polled considered Saturday and Sunday as factors in estimated delivery dates, according to Pitney Bowes. Those respondents expected a Friday order with 3-day shipping to arrive Monday at the latest.
"Taken together with responses to our hypothetical 3-day shipping scenario and the largely unchanged definition of fast, we see the 41% of online shoppers who call Sunday package delivery important as aspirational thinkers, not a groundswell of consumers demanding Sunday service from retailers," Pitney Bowes said.
However, expectations may have shifted further in Sunday delivery's favor since that survey took place. Weekend delivery is an important perk for retailers looking to compete more effectively against the likes of Amazon, Walmart and Target, said Jie Zhang, a professor of marketing and Harvey Sanders Fellow of Retail Management at the University of Maryland. All three have made heavy investments in recent years to deliver to customers faster.
"From the shoppers perspective, it's not like most people absolutely need that weekend delivery, but to know that it is within their range as one of the options they could check really makes a huge difference," Zhang said.
