Late last week, one global Atlanta-based company purchased a smaller Atlanta-based one, with freight transportation and logistics titan UPS announcing it entered into an agreement to acquire Roadie, and on-the-way delivery service with the nation’s largest local same-day footprint.

UPS officials declined to disclose the value of the transaction, which is expected to be completed in the fourth quarter of this year.

And they explained that the company’s customers, which include large enterprise shippers, are more frequently looking for local same-day delivery services for all types of goods, rather than traditional packages. What’s more, UPS said that Roadie also provides service for shipments that are not compatible within the UPS network, given specific shipment characteristics such as size and perishable nature, with those goods often in shopping bags and lacking the required packaging to move throughout the UPS network.

“Roadie’s leading technology, combined with UPS’s portfolio, will open doors for new growth opportunities,” said UPS. “Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities. The Roadie technology platform is purpose-built to connect merchants and consumers with contract drivers to enable efficient and scalable same-day local delivery services nationwide.”

When the acquisition becomes a done deal, UPS said Roadie will retain its name and maintain its high customer service levels, while UPS package car drivers will still deliver packages in the UPS network. And it added that goods moved by Roadie will not cross over into the UPS network, and, conversely, packages moving in the UPS network will not mix into Roadie’s network.

Going back to the onset of the pandemic in March 2020 and before that, too, the proliferation of consumer e-commerce buying habits has expanded significantly, due to pandemic-related lockdowns and closures. While things have gradually opened up since that time, e-commerce buying activity has remained strong and that has been reflected in the increasing interest and focus on last mile logistics.

That was made clear by Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sector.

“The UPS-Roadie deal signals the growing importance of tech enabled last-mile services,” said Gordon. “Every major logistics company should be thinking about how to address last mile. As consumers continue to expect faster delivery times, Transportation companies need to find a way to strengthen in this arena or they will risk falling behind.”

A research note from Morgan Stanley analyst Ravi Shanker noted that Roadie’s delivery platform is comprised of 200,000 drivers and delivery to more than 20,000 zip codes, which reaches more than 90% of U.S. households.

“As part of their customer first strategy, UPS has previously stated their focus on providing increased offerings such as next- and same-day delivery to keep up with shifting consumer preferences/expectations,” wrote Shanker. “[UPS] management also expects the acquisition to help them improve and potentially add additional UPS small package capabilities.”

In a November 2020 interview with LM, Roadie Founder and CEO Marc Gorlin said that with parcel carriers having limited capacity, coupled with seasonal charges and the presence of last-mile players and the USPS, Roadie has positioned its same-day advantage as a key competitive benefit.

“We can go longer distances and are not stuck to restricted routes like some regional players are,” he said. “And we are nationwide and not limited to a certain geographic area. We are also built as a crowd sourced model, with an unlimited number of drivers. The other thing is that even with regional carriers and even UPS and FedEx, they need to get all of their stuff in a tractor-trailer to a place to get into their network[s] and do it. These products have typically gone from a DC to these places, and if you are going to get into local markets, you have to get product into local markets, and we do have an expertise in going into stores and becoming a ‘mini-DC’ of the product to get to the end customers. And we are already built and set up and equipped and technically integrated to do so.”

*By Jeff Berman is Group News Editor for Logistics Management*

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