LOS ANGELES (Reuters) – Walmart (NYSE:WMT) and Target are testing their own home package delivery services in the United States – stealing a page from Amazon’s play book – as e-commerce demand strains traditional carriers like United Parcel Service (NYSE:UPS), FedEx and the U.S. Postal Service.
The move is just the latest example of how Walmart Inc and Target Corp (NYSE:TGT) aim to close the gap with Amazon.com Inc (NASDAQ:AMZN), the No. 1 online retailer. Amazon has recruited armies of small businesses to provide delivery services from vans emblazoned with the company’s logo – an effort that has helped it control customer wait times and costs.
UPS, FedEx Corp (NYSE:FDX) and the USPS have been inundated with packages since the coronavirus pandemic hit U.S. shores last year. That has forced retailers to seek new ways to get goods into the hands of customers while containing soaring delivery costs.
Now Walmart – a key FedEx delivery customer – has been trialing its first company-branded “last-mile” delivery vans, John Furner, Walmart’s U.S. chief executive, said on the company’s earnings call on Tuesday.
Since January, a small, electric van fleet has made deliveries in the Bentonville and Rogers (NYSE:ROG) areas near Walmart’s Arkansas headquarters, company spokeswoman Camille Dunn said. The drivers are employed by Walmart, which also employs its own semi-truck drivers.
Target earlier this year began testing home package delivery from a new sorting center in its hometown of Minneapolis. Workers in that center group packages by zone and hand some over to drivers for Shipt – the shopping and delivery service Target bought in 2017. Shipt drivers are independent contractors and use their own cars for deliveries.
The move aims to “add capacity, reduce costs and enable more flexibility,” Target Chief Operating Officer John Mulligan said on a conference call on Wednesday.
Walmart, Target and Amazon also use gig workers to make speedy, same-day deliveries from stores. Amazon’s service is called Flex (NASDAQ:FLEX). Walmart has its own Spark Driver delivery platform and taps on-demand services from companies such as DoorDash and Postmates. Target depends on Shipt and other providers.