Dive Brief:
- Parcel carrier GLS is expanding its coverage into several new states by linking its network with other delivery providers, GLS US President Steven Bergan said in an interview with Supply Chain Dive.
- Partnerships with United Delivery Service, Lone Star Overnight, Better Trucks and Courier Express allows GLS to reach markets in states including Texas, Illinois, Wisconsin, Ohio, Georgia and Florida, Bergan said. "Whatever area those four players cover is what we're getting access to," he added.
- The expansion is currently focused on parcels shipped from GLS' footprint in the western U.S. to other carriers' networks out east, according to Bergan. In three to six months, GLS aims to have the other carriers able to ship parcels from their coverage areas into its network.
Dive Insight:
Expanding into new markets is an expensive endeavor for traditional parcel carriers, particularly in terms of labor and equipment needs. Even with adequate capacity, new entrants have to set themselves apart from incumbent carriers that have established customer relationships in the market.
Those complexities spurred GLS to tap into partnerships to expand its coverage area, rather than braving it alone in new markets.
"That's really going to be the pathway over the next three years here of how we can handle more ZIP codes," Bergan said.
The expansion will help GLS better compete against parcel delivery giants FedEx and UPS, Bergan said, noting the customer overlap each of the involved carriers has. GLS' transit times into these new markets "probably is not the same right now as FedEx or UPS," Bergan said, but the company expects to reduce those times by at least one day as volume increases.
GLS is working with the involved carriers on an individual basis, rather than as a collective effort. One key to a smooth rollout with each carrier centers around maintaining a package's visibility even when it enters another network, Bergan said. Another is allowing different companies' IT systems to communicate with each other to address customer needs.
"A critical component why we're working with these four [carriers] is the tech," Bergan said.
Better Trucks co-founder and CEO Andy Whiting highlighted the strength of his company's technology in an emailed statement about the partnership.
"The partnership will give GLS customers seamless access to Better Trucks’ best-in-class technology and service across our entire footprint," Whiting said. "The bilateral relationship will also unlock west coast markets for Better Trucks customers.”
