As traditional parcel carriers face rising competition from an increasingly diverse array of carriers, the financial services unit of UPS has published a white paper aimed at discrediting last-mile delivery companies that utilize gig drivers even though it owns a crowdsourced delivery platform. Not discussed is the possibility that shippers are looking for delivery alternatives because of frustration over the size and frequency of rate increases from FedEx and UPS.
The paper, published on Monday, serves as a promotional vehicle for UPS Capital’s InsureShield Shipping Insurance, which the company says can help merchants mitigate last-mile risks. However, it also offers valuable insights for merchants into the habits of e-commerce buyers.
Online merchants are struggling to meet customer expectations for ultra-fast, reliable delivery and control over their delivery experience, while containing costs, but gig logistics providers have not proved to be a reliable solution, UPS Capital said in the paper.
Sixty-two percent of merchants reported an increase in damage, theft or delays tied to gig-driven deliveries. Only 12% of respondents expressed confidence in gig carriers’ service quality compared to 69% in 2022 who believed gig services provided superior customer satisfaction over traditional carriers, according to the research by Dynata commissioned by UPS Capital.
Dynata polled 500 e-commerce vendors and 1,000 U.S. consumers for the survey.
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