Newspapers have been undergoing a painful transition to digital publishing for going on two decades now. One of the industry's biggest chains, Gannett, is reportedly eyeing a way to get more revenue out of its fleets of delivery trucks and newspaper carriers, which just aren't as busy—or loaded down—as they used to be in the heyday of print.
Now the Wall Street Journal reports that Gannett is speaking with consultants in the parcel delivery industry, and has also had meetings with Amazon, citing sources familiar with the matter.
Gannett isn't the first newspaper chain to explore the possibilities of developing a parcel-delivery business. Tribune Publishing conducted a brief pilot delivery program with Amazon in Chicago several months ago, but ended up dropping its plans due to the potential loss of federal tax breaks newspaper companies get on delivery operations, according to another WSJ report.
Analysis: All Aboard the Package-Delivery Train?
While FedEx, the US Postal Service, UPS and DHL remain dominant players in the shipping industry, the landscape could soon change in significant ways. For one thing, Bloomberg recently reported that Amazon is developing a global logistics and delivery business under the codename Dragon Boat, which would put it in direct competition with those carriers.
In addition, Amazon is rolling out a crowdsourced, Uber-like delivery system called Flex, where independent contractors use their own vehicles to bring packages to customers, aided by a mobile app.
And while the larger players in logistics outsource some of their deliveries to smaller third-party operators, factors such as the continual rise in online retail spending plus consumers' desire for fast and local delivery suggest there's room for new, non-traditional players under the right conditions.
"Any corporation who has physical assets delivering goods, could they sell that spare capacity and maximize their investments?" says Constellation VP and principal analyst Guy-Frederic Courtin.
As a hypothetical example, Courtin cites the office supply provider W.B. Mason, which provides same-day and next-day delivery to customers. W.B. Mason has expanded its product selections over the years, adding coffee and snacks to the printer paper and toner. It's not inconceivable W.B. Mason could start delivering packages, or help with package returns, as a subcontractor to one of the big delivery services.
Any company that has spare transportation capacity but isn't in the package-delivery business needs to make a couple of important considerations, Courtin adds. "First, it's being really laser-focused on the kind of products they want to deliver," he says. The other step is to look at technology that can help match their spare capacity with demand.
Still, the transition would not be simple, Courtin notes. "It's easy for us to talk about from a philosophical standpoint, but it's different from an execution standpoint."
Reprints
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.