The Courier Biz Searches For New Life
“When people think about couriers or messengers, they tend to think about document delivery, and that’s a very small part of our business,” says Joe McGraw, president and CEO of Roseville-based Street Fleet. “We deliver a lot more product than anything that’s document-related. That [business] has all decreased over the years [due to] the fax machine and certainly email and other electronic transmission.”
Street Fleet’s courier services range from on-demand 15- minute bicycle deliveries within a downtown area to overnight distribution within the five-state region. Its largest avenue of growth has been in acquiring smaller courier companies, averaging one a year over the last 19 years. (This included the bicycle messenger outfit Blazing Saddles, which now fulfills 100 percent of Street Fleet’s bike deliveries.)
With fewer document deliveries, Street Fleet has added new services to supplement and grow the business, says McGraw, including warehouse storage, fulfillment and distribution. “When it helps us gain more deliveries, that’s where warehousing makes sense for us, because at our core we are a delivery company.”
Making money in deliveries is less about the type of package or mode of transportation; rather, it’s a volume play. “The profitability in the courier business really comes down to the synergy that can be gained by grouping deliveries together,” says McGraw. Delivering to multiple customers on one run is more efficient for the customer and more cost-effective for the courier than having a driver out for each delivery.
“The biggest challenge that we face is that when we start every day we don’t know if we’re going to be delivering 2,500 packages or 3,500 packages. And on any given day we’re either going to have too many deliveries or too many drivers. It’s rare that it aligns.”
Which makes coordinating technology critical to profitability. Dispatchers track drivers using GPS and route deliveries based on who is in the vicinity of a pickup, and then upload available jobs to a dispatching app that drivers use to claim jobs they want.
McGraw says that the recent increase in retailers offering same-day delivery (most notably Amazon) will offer new opportunities for couriers to make some of those deliveries—possibly by drone. —Megan Wiley