AMZN Amazon.com Inc

By Paul Ziobro 

United Parcel Service Inc. will start delivering packages on Sundays next year, following the move of FedEx Corp. as the two package giants battle to control the nonstop demands of online shopping.

UPS, which currently delivers and picks up packages six days a week, will switch to seven days in January. It will be assisted in part by the U.S. Postal Service, which delivers some UPS packages to homes for the final leg of a package's journey.

In May, FedEx said it would move to seven-day delivery to most U.S. homes starting in January, with executives noting that Americans shop online seven days a week and that there is increasing demand for deliveries every day. Amazon.com Inc., one of the biggest package shippers, is building out its own transportation operations and fleet of local delivery vehicles.

The changes illustrate a grand realignment of America's parcel delivery apparatus as companies try to determine how best to deliver packages for insatiable online shoppers at the lowest cost possible.

UPS recently negotiated a union contract with its workers that created a new type of driver that would work weekend shifts at a lower pay scale than its regular delivery drivers.

The company laid out Tuesday additional steps it is taking to meet shipping challenges, including teaming up with the retailers CVS Health Corp., Michaels Cos. and Advanced Auto Parts Inc. to use as many as 12,000 of their stores as new drop-off points for deliveries and returns. More of these access points help lower delivery costs because its cheaper to deliver multiple packages to one location instead of singular deliveries to multiple homes.

UPS already has tens of thousands of such drop-off points at neighborhood UPS stores and other small businesses such as dry cleaners, but it is now expanding that to national chains.

FedEx itself has pushed ahead into expanding its own onsite network, recently announcing that it would work with Dollar General Corp. to use 8,000 of the retailer's stores as drop-off and pick-up locations.

UPS and FedEx both say that more than 90% of Americans will live within five miles of a drop-off location in their networks.

In a futuristic move, UPS is establishing a new drone delivery subsidiary called UPS Flight Forward Inc. It is seeking approval from the Federal Aviation Administration to allow flights beyond the line of sight of operators, at night and with an unlimited number of drones and operators.

The announcement from UPS on Tuesday came a day before it was slated to report its latest quarterly results.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

July 23, 2019 18:07 ET (22:07 GMT)

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