Dive Brief:
- Reuters reported UPS is considering transport of bulky items — which includes furniture — as online furniture sales increase.
- UPS is also reportedly in talks to hire trucking company Werner Enterprises to transport bulky goods, according to Reuters. This could be part of the $12 billion investment in logistics UPS announced earlier this year.
- The move would likely give UPS a competitive edge over FedEx, which currently does not transport bulky items that weigh more than 150 pounds.
Dive Insight:
After a record holiday season for e-commerce, online sales are continuing to increase in a variety of sectors.
Despite skepticism that online grocery will go mainstream, online grocery sales are expected to hit $100 billion by 2025, and grocers are already exploring home grocery delivery options for online shoppers.
Furniture could be the next area for e-commerce growth, especially since IKEA — the giant, Swedish-founded ready-to-assemble furniture seller — announced a month ago its plan to focus on e-commerce growth.
According to One Click Retail data, Amazon's furniture sales grew 33% YoY in 2017. That suggests more consumers are starting to buy furniture online, which means e-tailers including Amazon and IKEA need 3PLs who can transport those goods.
In light of that data and the recent trends, UPS' move is strategic. XPO Logistics already transports heavy and bulky items, but now UPS sees the merit to competing in the space. UPS' decision also shows where e-commerce might be headed: by exploring the transit of large, bulky items, the 3PL is betting on online furniture sales taking off.
