As reported by Bloomberg:
Kathryn Maloney let loose on Twitter in July, chiding United Parcel Service Inc. for sending her package to a grocery store for pickup after making just a single delivery attempt at her home in Brooklyn.
She had ordered a 35-pound air-conditioning unit and didn’t fancy the six-block walk home in 97-degree heat. As Amazon.com considers speedy, pinpoint drone dropoffs, UPS’s reliance on retailers “makes zero sense to me because to me it seems so regressive,” Maloney said in an interview.
In time for the holiday season, UPS is rolling out to 100 cities a program that requires people in some neighborhoods to fetch packages at nearby locations — such as a druggist or dry cleaner — if they weren’t home to meet a driver. UPS says the service, introduced a year ago in New York and Chicago, will trim costs by ending second and third delivery attempts, and can save consumers a trip to a distant customer center.
While the company said the Access Point program receives a favorable response on surveys, it’s gotten mixed reviews judging from social media sites, according to John Haber, a shipping consultant in Atlanta.
Adapted from a Belgian company UPS acquired in 2012, Access Point targets neighborhoods with a high rate of failed deliveries, or what UPS internally calls “send-agains.” Those include older neighborhoods, areas with rows of townhouses where the doorstep is in plain sight, or apartment buildings with no doormen, said Geoffrey Light, president of product development.
In these areas, UPS previously would try three times to deliver a package before leaving it at a customer service center for as long as five days. After that, UPS would return it to the shipper. Now, the company will try just once before sending it to a store.
In all other neighborhoods, packages are left at homes the first time whether the recipient is there or not, said Light. That won’t change under the new program. UPS delivers more than 95 percent of all deliveries on the first attempt, he said.
UPS could save millions by aggregating packages at a single store in each neighborhood, instead of making lots of stops at every home. It costs UPS $1.50 to $2 per home delivery, meaning its profits may be eaten up in multiple attempts, said Satish Jindel, a logistics consultant.
UPS’s Light declined to comment on specific profit figures while noting these deliveries amount to many thousands of packages.
UPS also hopes Access Point relieves some driver strain during the busy holiday period, after stumbles in the past two holiday seasons. The company underestimated the number of last-minute online shoppers in 2013 and was unable to deliver all presents by Christmas. In 2014, UPS added too many employees and sorting facilities and watched them sit idle at times, costing it millions.
While UPS has studied the use of drones, including to help with disaster relief efforts, it hasn’t announced any plans to adopt unmanned aerial vehicles for ordinary home deliveries.
UPS wants to have 8,000 Access Point locations nationwide by December, including its 4,400 existing UPS Stores. The pitch to shopkeepers: they get less than a dollar per package, but get foot traffic that might otherwise pass by, Light said.
In Hyattsville, Maryland, mattress salesman Anthony Tuah said he found it “odd” to pick up his delivery at a dry cleaner, but on balance likes the service.
“I would appreciate if they made a third attempt, but working so much, I’m not going to be home, so it makes sense that they do this,” said Tuah.
A UPS survey last year showed that three-quarters of package recipients liked Access Point better than the old system, spokeswoman Natalie Godwin said.
UPS would prefer that people living near Access Points forgo even a single home-delivery attempt, opting instead for pickups at the local convenience store.
“Why chance it?” Godwin said. “Why even attempt to have a driver leave it at your house, when you have an Access Point right around the corner?”
UPS expressed remorse about the missed delivery for Maloney, the air-conditioner recipient. While the company promises a second delivery of items too heavy to carry, that argument didn’t prevent her blast on Twitter.
“Please Stop Apologizing And Telling Me It’s For My Convenience,” Maloney tweeted.
Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.