Are UPS and FDX Being Disrupted?

Jul 10, 2021

Earlier this week on the TD Ameritrade Network, I talked about the major shift in logistics that is underway in the e-commerce business.

But at LikeFolio, we have been on to this trend for two years now.

We first delivered a deep dive into this major consumer shift in our August 2019 MegaTrends report, highlighting delivery services and technology winners and losers.

Our major takeaways: delivery is non-negotiable, speed is of the essence, and it had better be free.

Since then, we’ve watched a global pandemic accelerate this already-building consumer trend by an estimated two years, adding another $105 billion in e-commerce sales in 2020.

LikeFolio data highlights which areas are still most important to consumers today:

Today, the top-growing trends in fulfillment are curbside pickup (+1,000% versus 2019) and same-day delivery (+59% versus 2019).

We could not even place curbside pickup on the chart above because the growth rate was so explosive that it dwarfed the remaining trends!

What does this mean?

Looking ahead, expect to see major winners emerge in local logistics, while traditional shippers like UPS (UPS) and FedEx (FDX) become commodities.

These winners could take multiple forms:

  • Last-mile delivery services like UBER or DoorDash (DASH)
  • Retail giants with same-day fulfillment: Target (TGT), Walmart (WMT), Home Depot (HD), Lowe’s Cos. (LOW)
  • Third-party platforms enabling small-business e-commerce fulfillment: Shopify Inc. (SHOP)

But how will we know which one of these local logistics providers is up to the task of truly disrupting the space?

Consumer Happiness levels can give us a really good clue, especially early on.

Note on the chart above, FedEx is seriously lagging behind all other movers-of-things, and UPS continues to be the most-loved company in the shipping space.

But as consumer preferences for real-time delivery take hold, it’s companies like DoorDash (DASH) and Uber (UBER) that could become the go-to fulfillment arm of the booming e-commerce sector.

We’ll be monitoring this space closely for opportunities as consumer preferences develop.

Stay tuned…

Enjoy,

Andy Swan,
Founder, LikeFolio