Fast-growing e-commerce parcel carrier Veho on Wednesday announced the expansion of its delivery footprint to Southern California, underscoring how competition in the parcel sector is heating up.
Parcel shippers have increasingly turned to alternative carriers like Veho for lower delivery costs as FedEx, UPS and the U.S. Postal Service raise rates and surcharges.
Veho is now providing delivery services to much of Los Angeles, Long Beach, Orange Country and the Inland Empire, allowing e-commerce brands to reach about 8 million residents. New distribution centers in Santa Fe Springs and Ontario will enable more than 100,000 parcel deliveries per week, the company said.
Spokesman Evan Wagner said Veho is starting Southern California operations with about a dozen clients.
Earlier this year, Veho began serving St. Louis, Cleveland, Pittsburgh, New York City, Richmond, Virginia, and Louisville, Kentucky, a UPS stronghold.
Veho’s network now covers 38% of the U.S. population in 56 major markets.
New York-based Veho said additional coverage and distribution centers across California are planned in the coming months.
The company, which provides last-mile delivery for retailers such as Macy’s, Sephora, Lululemon, Saks, Stitch Fix, Hello Fresh, Nespresso, Warby Parker and logistics providers like Flexport, ShipBob, ShipHero and Stord, says volume has more than doubled in the past six months compared to the 2024 holiday peak season.
Co-founder Fred Cook explained in a LinkedIn post why it took longer than anticipated for Veho to open for business in California.
“Huge number of client fulfillment centers, enormous metro areas, fair weather all made it perfect for our model. But between the cost and client demand, we got pulled East. And in every one of the 7 years since then as we’ve done the same math, our expansion continued to tend toward building dense regions in the middle of the country and East Coast,” he wrote.
Veho went to market in 2018 with a different business model than most delivery startups. Instead of using dedicated independent contractors, it relies on 85,000 crowdsourced drivers and a tech platform to match them to packages for delivery.
Its core product is Ground Plus, with transit times of one-to-three days. In January, Veho began offering a two-to-five day Premium Economy service.
The company’s platform gives e-commerce consumers control over their deliveries, including the ability to provide delivery instructions, communicate with their delivery driver, reschedule or reroute deliveries and receive photo proof of delivery. A client portal enables shippers to track shipments in real time and proactively address issues before they become problems.
During the summer Veho participated in a test of delivery robots.
Veho says its on-demand partner network and AI-assisted routing algorithms enable it to provide high service levels at lower cost than traditional carriers.
On Tuesday, rival carrier OnTrac announced a new deferred service and an express coast-to-coast service in partnership with Clearjet, which uses narrowbody passenger aircraft for middle-mile transportation.
Veho began offering deferred service eight months ago, as an alternative to the Postal Service’s Parcel Select and Ground Advantage products, as well as UPS Ground Saver, and saw an immediate influx of new customers, said Wagner. And it teamed with ClearJet in February 2024 to enable online merchants with West Coast distribution centers to quickly reach the central and eastern United States, where its network is more concentrated.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
RELATED READING:
OnTrac challenges FedEx, UPS with cross-country delivery services
Bezos-backed robotics firm teams with Veho on e-commerce deliveries
FedEx and UPS cease parcel discounts, ‘weaponize’ fuel surcharges: report
