Fleet Management News & Business Info | Commercial Carrier Journal
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COMMERCIAL CARRIER JOURNAL | MAY 2016 43 INNOVATORS PROGISTICS DISTRIBUTION Oakland, Calif. But the last-mile market is fraught with inefficiencies and higher costs of business than most other trucking segments. One of the greatest variables in servic- ing ecommerce customers in last-mile logistics is traffi c congestion, as most of these services are offered in metro- politan areas. In Amazon's same-day delivery model, orders placed before noon are guaranteed by 9 p.m., mean- ing delivery vehicles are on the road at the height of rush-hour traffi c running from a distribution center or retail loca- tion to the consumer's front door. Another constraint on the last-mile segment is overwhelming freight vol- ume. Even with the tens of thousands of trucks and vehicles at the disposal of companies such as FedEx, UPS and DHL, the surge of business-to-consum- er and business-to-business deliveries has outpaced capacity. "Amazon recognizes that they can't rely on UPS, FedEx and the U.S. Postal Service to deliver all of their packages," says Ritch. "They have now committed billions of dollars into developing their own delivery system, and just three years ago, they weren't doing anything there." Of course, Amazon isn't alone in the ecommerce world. Google, as well as startup same-day delivery service com- panies such as Deliv and GrubHub, all offer greater opportunities for Progistics Distribution and other similar carriers. "We are an active player in that Progistics Distribution finds efficiency in inefficient niche BY JEFF CRISSEY N estled in the outskirts of Silicon Valley in neighboring Oakland, Calif., Pro- gistics Distribution has been serving customers in the same-day delivery market for 30 years under different names. During that time, the company has grown to become a dominant player in the Western United States with 700 company drivers and nearly 500 independent contractors. It recently expanded its footprint to include markets in Illinois, Texas and seven major Canadian cities. The ecommerce boom of the last few years has opened up new last-mile delivery opportunities for Progistics Distribution, which has on-demand and urgent delivery services as core segments of its business. "This is an exciting time," says Joel Ritch, chief executive offi cer. "The landscape has changed dramatically in the last three to four years. Until then, the concept of ecommerce really did not exist." The ecommerce phenomenon has greatly increased customer expectations for service. What used to be a minimum three- to four-day turnaround from order to delivery just a few years ago has shortened to next-day service – and even same-day service in the case of Amazon, which offers that rapid turnaround in 27 metropoli- tan cities across the country for more than one million items. "We have been providing same-day service for companies like Saks, Nordstrom and Macy's for as long as I can remember," says Ritch, "but now product is coming directly out of stores instead of warehouses, and people want their packages deliv- ered in only one to two hours." The company leverages delivery resources and carves out a 'last-mile' specialty with technology and customer service.