ATLANTA— Mark Eaves has been a tractor-trailer truck driver for 13 years. Lately, though, he is more like your UPS man on steroids.
On a typical recent day, he throttled his semi-truck through the narrow streets of Gwinnett County, Ga., subdivisions, avoiding yard crews and children on bikes, until he reached the delivery he dreaded most: a 238-pound gun cabinet ordered online from Gander Mountain.
A seismic change in the way Americans are shopping is affecting everything from how, when and where they make purchases to whether they pay with credit cards or mobile clicks. The transformation is rocking retail and shipping and rippling through real estate, banking and tech.
It is also roiling trucking, which is caught in a tug-of-war with shippers and parcel carriers over who should pay for the true price of delivering e-commerce, especially the ever-bigger items consumers are ordering. As they struggle with unanticipated costs, truckers are weighing whether to specialize, partner or ratchet up prices, which would pressure shippers and maybe consumers.
E-commerce comprises 10% to 20% of deliveries in the $35 billion trucking industry segment called LTL or “less-than-truckload,” estimates Kevin Zweier, a vice president at supply chain consultancy Chainalytics. LTLs pack loads from multiple customers into a single truck.
Big rigs like the one Mr. Eaves drives for Fishersville, Va.-based Wilson Trucking Corp. are increasingly hauling consumer goods they weren’t designed for into neighborhoods, bumping tree branches and utility wires. Truck drivers, used to moving efficiently from one loading dock to another, must now juggle big, often heavy and more time-consuming home deliveries, too.
Mr. Eaves estimates residential deliveries take him 35 to 40 minutes, compared with 10 to 15 minutes at businesses. A typical United Parcel Service Inc. delivery, by contrast, averages about four minutes.
“Have you ever tried to lift a 2,000-pound pallet [of paver stones] with a pallet jack?” Paul J. Dugent, a vice president of Estes Express Lines asked while speaking about industry changes at a recent supply chain conference. For anybody trying to get a big truck into a cul-de-sac, “chances are we’re going to take out a mailbox,” he said. Home deliveries are “the biggest thing this industry is dealing with right now.”
UPS and FedEx Corp. are raising prices for delivering big, heavy items such as kayaks and picnic tables that don’t fit their automated systems and cut into profit margins. Bothnearly doubled to $110 the extra fee on oversize items in their parcel ground networks in November. In March FedEx said soon it will assess a special handling surcharge to even more packages.
‘Have you ever tried to lift a 2,000-pound pallet [of paver stones] with a pallet jack? ’
—Paul J. Dugent, a vice president of Estes Express LinesShipping by truck instead of parcel van can be cheaper. A retailer might pay $104 for truck delivery of a 110-pound clothes dryer in a metropolitan area versus $234 by parcel carrier, estimates SJ Consulting Group, a transportation consultancy. That has helped residential shipments in the LTL segment grow at a compound annual rate of 6.9% compared with commercial shipments’ 1.2% over six years through 2015.
Some industry players are specializing in and charging extra for the last time-consuming leg of an item’s transport, and also offering specialty “white glove” services such as installation or assembly.
But many traditional trucking companies like Wilson, which provides LTL and other transportation services mostly throughout the Southeast, are caught in the middle. The Internet “is creating all this activity,” said Wilson’s president, Steven D. Gast, as he walked his Conley, Ga., loading dock recently, pointing out oddly shaped outdoor fireplaces, a Chevy Silverado hood, boxed mirrors marked “fragile” and spa covers from Florida-based Prestige Spa. All require extra space or special handling. “If you’re the seller, you’re happy. If you’re the guy delivering it, you’re pulling your hair out,” he said.
Amazon.com raised consumer expectations. Now, shippers like Home Depot Inc. oblige, mixing big and heavy residential shipments in with its commercial ones because it makes shipping simpler. So firms like Wilson are “kind of forced to take it all if they want to do business with that shipper,” says Mr. Zweier of Chainalytics.
The $25 minimum fee often charged by trucking firms for a home delivery is probably not covering the extra labor, equipment and time, he says. Drivers, for instance, are often paid $18 to $25 an hour.
Mr. Gast says Wilson is working with customers to figure out fair pricing and is evaluating partnerships that would allow it to focus on business deliveries. “Nobody’s figured out the cost side,” he says. “Everybody is scrambling.”
Mr. Eaves’s truck trailer is 45 feet long and 96 inches wide, with room for a single layer of 22 standard pallets which can be double-stacked if items aren’t fragile or oddly shaped. Trailers are made to back up flush to a loading dock for emptying by forklift.
But circular dining tables and fireplaces don’t fit well with industrial cargo. Heavy gun cabinets require expensive hydraulic lift gates, or elevators. Wilson has added about 50 in the past couple of years at about $3,000 to $5,000 each, Mr. Gast says. That is about 25% of its fleet.
Mr. Eaves can zip in quickly to execute his business drop-offs, but gated residential communities have dead ends and too-tight cul-de-sacs.
So he studies Google Earth and calls ahead. Technically, he is only required to deposit loads on sidewalks. Customers don’t know that. It once took an hour to deliver two 2,500-pound pallets of flooring to a house, he says. He got them off his truck, but to get them up the driveway, he had to chain them to a sport-utility vehicle.
He drew the line at delivering 5,000 pounds of tile. That customer’s driveway “was straight uphill,” he recalls.