Consultant Insight: More cargo space for same-day deliveries

Transportation providers are investing in their networks to address faster delivery times as retailers add same-day delivery services to their last-mile delivery options and distribution networks are redesigned closer to consumers. In fact, almost half of consumers will abandon their online purchase if they consider the delivery time frame to be too long, according to a study by delivery management technology firm nShift. Meanwhile, a June 2022 study from retailer Sephora conducted with global online market research firm Dynata found that same-day delivery is the most popular service users want to see. About 63% surveyed said they would use same-day delivery because they ran out of a favorite beauty product and needed it quickly. [caption id="attachment_69752" align="alignright" width="263"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Same-day delivery providers such as Instacart, DoorDash and Shipt are adding more retailers to their list of clients. Most recently, Big Lots signed on with Birmingham, Ala.-based Shipt in June. Shipt, a subsidiary of Target, delivers on behalf of other retailers as well. Under the agreement, Big Lots’ e-commerce shoppers will have access to Shipt’s same-day services for mid- and small-sized goods such as toys, paper products and small furniture items like chairs and desks. Some trucking firms are also adapting by expanding terminals, while last-mile providers like UPS and FedEx continue to invest in automating facilities for faster service. Amazon launched its Prime Air service in 2016 to assist in its promise of two-day and next-day deliveries across the U.S. and since then has continued to ramp up operations. Amazon Air most recently opened its 600-acre campus at Cincinnati/Northern Kentucky International Airport (CVG) in August 2021, including an 800,000-square-foot sortation facility. U.S. total domestic cargo revenue ton-miles have tipped upwards as a result — growing 4.3% year over year in 2016 to 10% in 2017 and then up 2.8% in 2019, according to the Bureau of Transportation Statistics. During the pandemic, U.S. domestic cargo revenue-ton-miles were up 14.2% in 2020 and 7.5% in 2021. Year-to-date through April 2022, U.S. domestic cargo revenue-ton-miles were up 1.4%. Airports expand facilities to meet faster last-mile deliveries U.S. airports are also expanding their cargo facilities to assist supply chains in meeting faster delivery times due to increased demand. “ We’re out of cargo space,” Hartsfield-Jackson Atlanta International Airport’s (ATL) General Manager Balram Bheodari recently noted. “ Amazon started with one daily flight ; now, if I could give Amazon more cargo capacity, there would be ten daily flights. That’s how fast they have grown in less than three years, and so we’re going to be building another half a million square feet of cargo facilities with ramps and taxiways and stuff like that.” Meanwhile, Capital Region International Airport (LAN) in Lansing, Mich., is launching a project to increase its current cargo ramp space by more than 60%, adding more than 400,000 square feet of pavement in anticipation of growing shipping needs from companies like Amazon, which will open a distribution center nearby. “The cargo ramp is one of the key projects we’re finishing up as we start looking at what’s the next phase of the airport,” LAN President and Chief Executive Nicole Noll-Williams said recently. “We want to make sure that we’re forward thinking. Where’s the future going to be with drone technology for the delivery of products? Where will there be opportunities to support battery advancements in aircraft?” Nashville International Airport (BNA) is also expanding with plans for a new airfreight building as part of a renovation and expansion plan. The facility will better support airlines’ cargo requirements. Nashville has been growing its air cargo capacity , and Amazon Air launched operations at the airport in September 2021.Several other U.S. airports are investing in cargo expansion plans, including Greenville-Spartanburg and Harrisburg Airports .

Consultant Insight: More cargo space for same-day deliveries

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