Dive Brief:
- Last-mile delivery provider Veho will expand its services to Detroit and Columbus, Ohio, beginning later this summer, according to an Aug. 5 press release.
- The startup competitor to FedEx, UPS and other parcel carriers said the move is fueled by a 300% year-over-year increase in revenue from retail and apparel shippers in 2024.
- Following this expansion, Veho will provide next-day delivery in 44 markets in the U.S., including the 11 markets it entered in 2023. It also will add 5.3 million people to its coverage area, Veho Co-Founder and CEO Itamar Zur told Supply Chain Dive in an interview last week.
Dive Insight:
Zur hinted at potential expansion by the delivery provider in an interview with Supply Chain earlier this year. At the time, the co-founder was non-committal about potential target markets, but Columbus and Detroit were both flagged as locations “coming soon” on the company’s website. The latest announcement makes good on that promise.
The Midwest has been a popular target for last-mile delivery expansion recently. Next-day and same-day delivery provider Jitsu expanded its services into Detroit earlier this year, while OnTrac recently added several major Midwest markets to its coverage area.
Veho pursued Columbus and Detroit for its recent expansion due to their relatively large market sizes and based on customer feedback, Zur told Supply Chain Dive in an interview last week. The CEO also said that by entering these new markets, Veho can serve more volume across its entire network.
With most of its coverage focused on the East Coast and Midwest, as well as Texas and Colorado, the company is eyeing additional growth in 2025, Zur said, noting that Veho currently reaches about 35% of the U.S. population.
As Veho has expanded its own footprint, it has continually reported strong performance, including its recent surge in the retail and apparel sectors. The company also increased revenue by 90% year over year in 2023, Zur previously told Supply Chain Dive. However, despite the financial growth, in January, Veho laid off 19% of its corporate workforce, according to The Information.
“We’re running the company in a very financially disciplined way,” Zur told Supply Chain Dive at the time. “We’re getting more efficient and having a more nimble team.”
Focusing on efficiency and the customer experience have been the cornerstones of Veho’s strategy to differentiate from name-brand rivals like FedEx and UPS. To appeal to a wider range of clients, Veho has teamed up with Clearjet to service retailers with distribution centers outside the delivery provider’s network. In addition, Veho has partnered with Shippo, allowing merchants to integrate their Veho account on the e-commerce shipping platform.
“The market is ready for a technology player that has differentiated the customer experience to be able to serve the entire United States,” Zur said last week. “That's certainly the ambition that we have. And that is a plan for 2025.”
Veho’s expansion flies in the face of continued headwinds for last-mile delivery companies, particularly the traditional giants in the space. FedEx and UPS are offering more generous discounts to shippers as they try to grow volume in a soft market, while startups Point Pickup and Maergo ceased operations this year as they struggled against a glut of competition.
