17.10.15

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

UberRUSH: Uber's On-Demand Delivery Service Rolls Out in New York, Chicago, and San Francisco

Posted: 17 Oct 2015 09:01 AM PDT

Uber's Next Logistics Move – UberRUSH

Following a successful pilot in New York City, UberRUSH officially announced UberRUSH in three cities - New York, Chicago, and San Francisco.

SupplyChain247 reports Uber's Next Logistics Move – UberRUSH.
For a little over a year, Uber has been operating its UberRUSH delivery service as a pilot program in New York City.

Today it's making it an official part of the company, and expanding the courier service to Chicago and San Francisco, allowing customers to receive deliveries from local businesses.

UberRUSH competes directly with Postmates, delivering items like groceries, take-out food, and house supplies, albeit with a much larger fleet of cars on the road.

But unlike Postmates, when you open the Uber app, you won't be flooded with a number of businesses that can deliver something to you.

Uber has integrated its delivery service with a number of top e-commerce platforms used by small businesses like Shopify, Clover, ChowNow, and delivery.com, which should help increase the number of local companies that utilize UberRUSH.

While it's still early in the game for UberRUSH, the possibilities for Uber to truly succeed as a full-fledged delivery service are readily available.

With a fleet of cars that far exceed those operated by Postmates and Seamless, Uber could feasibly cut down on delivery times.

But with Amazon Prime Now still expanding and a number of other delivery startups sure to pop up in the future, UberRUSH is far from the last entry into this market.
What's Next?

Will Uber eventually go the next step and compete with FedEx and UPS?

While pondering that thought, please consider monkey-see, monkey-do, hikes of near-identical amounts at FedEx and UPS.

FedEx Rate Hikes

In September, FedEx Announced Rate Hikes on the basis people are shipping larger, heavier packages, and residential deliveries have increased.

  • FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%.
  • Package surcharges increase on packages that exceed specified dimensions.
  • Fuel surcharges apply based on weight

UPS Rate Hikes

This past week, UPS Announced Rate Hikes by the same 4.9% average.

  • Effective December 28, charges rise by an average of 4.9%
  • UPS Air and International services and accessorials, including UPSAir Freight rates within and between the United States and Canada will increase by an average net of 5.2 percent.
  • UPS announced surcharges for Over Maximum packages and tables for Ground Air and International fuel surcharges will increase on November 2.

Rob Martinez, president & CEO, Shipware LLC, a San Diego-based parcel consultancy, offered these comments:
What's surprising is that UPS is again increasing its fuel surcharge effective Nov 2, 2015. Where FedEx's latest announcement to increase fuel surcharges on 11/2/15 brought it more in line with what UPS charges today, the new UPS fuel pricing will again be higher than FedEx. It's also important to note that UPS will implement the 2016 pricing on Dec 28, 2015, a full week ahead of FedEx. Finally, UPS Freight pricing is also increasing an average of 4.9 percent effective Oct 26, 2015. To date, FedEx has not announced increases at FedEx Freight.
The Fed cheers these rates hikes. No one else does but the shippers and new competitors like Uber. Just thinking: What would an Amazon-Uber pairing be able to do?

Mike "Mish" Shedlock
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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