UPS has made an acquisition that highlights its continuing re-orientation towards e-retail. It has bought, for an undisclosed sum, Roadie, a “crowd-sourced delivery platform” specialising in very small consignments between consumers and, generally, local businesses.
UPS explains that its customers “including large enterprises, are increasingly looking for local same-day delivery solutions for goods of all types, not traditional packages. Roadie often provides service for shipments not compatible with the UPS network because of their size and perishable nature, and often because they are in shopping bags without the packaging required to move through the UPS system”.
UPS has had an established relationship with Roadie for several years, both as an investor and as a collaborator in software development. However, the two business models are remarkably different. Roadie describes itself as “crowdsourced” in that it relies on a pool of drivers to collect and deliver small consignments directly from both businesses and consumers over smaller geographical areas. It relies on ‘gig workers’ as drivers, communicating with Roadie through an app. This is obviously very different to UPS and its vast network of ground and air transport assets.
The purchase by UPS suggests that the two business models are complementary, yet UPS does not intend to immediately integrate its new acquisition, rather Roadie “will operate with the same name, providing the same great service to its customers. UPS package car drivers will continue to deliver packages within the UPS network. Goods transported by Roadie will not cross into the UPS network and packages transported in the UPS network will not cross into the Roadie network”. It might be asked what the employment status of Roadie’s drivers will be, now they are employed by part of UPS.
The importance of the Roadie acquisition in itself is not that great. Rather it illustrates that UPS is evolving as a business, with a need to develop new capabilities. Although Roadie is already a nationwide business in the US, if UPS is to fully serve the sort of non “traditional packages” it mentions its customers need delivering, it is going to have to eventually fully integrate the sorts of capabilities seen at Roadie. Doing this on a global scale might be hard work.
Source: Transport Intelligence, September 21 2021
Author: Thomas Cullen