The e-commerce boom is boosting courier service providers, including ProCourier Inc. of West Hartford.
For the past two years, e-commerce and healthcare have been among the two fastest growing sectors in the United States amid the pandemic.
But the massive increase in door-to-door package deliveries and the transport of medical supplies and test samples has also been a boon to another industry: last-mile courier service providers, which have seen demand for deliveries same-day skyrocketing, even as in-office shipping takes a hit in the age of remote work.
For Michael Gualtieri, president of West Hartford-based ProCourier Inc., a same-day delivery services company he founded in 1997, the pandemic fueled record sales.
“We’ve been growing 8-10% a year over the last few years. [several] years, but the last two years have seen our sales double,” Gualtieri said.
This is largely due to healthcare companies which, he estimates, account for 40% of ProCourier’s customer base. The company also has offices in New Haven, Stamford and Boston.
Gualtieri said he remains optimistic about future growth. Last month, it completed the acquisition of Hartford Courier, a delivery company located in downtown Hartford. Terms of the deal were not disclosed, but the move reflects the need to diversify revenue streams in an increasingly competitive and technology-driven environment.
Having a city-centric presence is especially important for timely pickup and delivery, he said.
“To be [in a downtown location] can cut our response time in half,” Gualtieri said, noting that this is a significant issue, especially since ProCourier largely provides one-stop deliveries.
Same day deliveries
A study by EFT, which tracks the supply chain and logistics industry, found that “delivery efficiency” was the top concern (25%) for customers, surpassing issues such as cost (13%) and “interactions with the end customer” (10%).
Customer demands – in an age of speed and convenience – have increased both expectations and pressures on courier services.
Steve Howard, president of the Customized Logistics and Delivery Association (CLDA), which has nearly 3,000 members, said real-time customer feedback has dramatically changed quality control and the delivery experience.
“Today, every delivery … comes with an email survey,” Howard said. “Yes [a courier company] does not do his job well, he may [reflect poorly] both on the delivery provider and on the customer [company].”
One of the biggest expectations of customers these days is same-day delivery, Howard said.
At the same time, many consumers also expect free shipping: more than 60% of EFT survey respondents said they would cancel an order without it, and 24% of consumers said were willing to spend more on purchases to qualify for free shipping. .
These expectations have created a need for improved technology to provide greater efficiency and predictive planning in the global last mile delivery market, which is expected to grow annually by 9%, from $108 billion in 2020 to more than $200 billion by 2027.
“A few years ago, giving a customer a four-hour delivery window was [acceptable], but today [customers] I want it cut down to an hour or two,” Howard said.
Continued investment in technology and data metrics has, in part, been a factor in the number of mergers and acquisitions in the messaging services industry in recent years, says Jason Burns, CLDA senior vice president and director business development at Dropoff, a delivery and logistics services company with operations in 38 cities nationwide.
Burns is head of mergers and acquisitions at Dropoff, which bought his family’s small New Orleans-based courier services business in September 2020.
Despite the uptick in business her company has seen during the pandemic, Burns said she needs more capital to sustain long-term growth.
“There is a lot of consolidation in the industry with bigger national companies [acquiring] regional players,” Burns said. “As a small business, it’s getting harder and harder to compete.”
The larger regional or national footprint, Burns said, also provides greater value to customers in multiple markets.
“If a company serves 20 markets, [customers] can see [the shipping/delivery] for each of these markets via a dashboard, which offers greater transparency [vs. using multiple couriers]”, Burns said.
And it’s not just traditional parcel delivery companies that represent an increasingly competitive landscape. The logistics and delivery sector has also attracted billions in venture capital in recent years, including drones and autonomous vehicles.
While ProCourier’s Gualtieri understands that new technologies — and the future of the city-centric workforce and remote working — will continue to evolve as we emerge from the pandemic, he said offering the peace of mind and prompt service remains of crucial importance, especially in the growing medical industry in which his company plays.
He also emphasized finding quality riders, which Gualtieri says has been the biggest challenge of the past two years.
Given the business customers ProCourier serves — from doctor’s offices to Fortune 500 companies — he said the appearance and professionalism of his more than 50 drivers, who work as independent contractors, is particularly important.
Despite the growth in home deliveries, Gualtieri said he remains committed to serving the business-to-business market, which has seen a downturn in some industries like law, where electronic filings have reduced the amount of physical documents to ship.
But with manufacturers and medical customers in high demand, he said he was optimistic that this windfall will continue.