Promise Fulfilled: UPS Buys Into Same-Day Delivery With Roadie

UPS is jumping into the same-day delivery game, announcing Friday that it is acquiring Roadie.

Terms were not disclosed. The transaction is expected to close in the fourth quarter of 2021.

"Roadie's leading technology, combined with UPS' portfolio, will open doors for new growth opportunities," UPS said in a statement announcing the acquisition. "Roadie's technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities."

UPS UPS said Roadie will continue to operate under the same name and will not carry goods from the UPS network, and packages transported by Roadie will not cross into the UPS network.

Roadie is an "on-the-way" delivery platform that counts some of the nation's largest retailers among its clients. The company leverages technology and gig economy drivers to handle last-mile, on-demand and same-day deliveries.

The Home Depot HD is an investor in Roadie and one of its largest customers. During the pandemic, Roadie expanded its services for the home improvement giant in March 2020 by increasing same-day delivery to 600 Home Depot stores. It added 300 more stores in April and by the end of 2020, Roadie was handling same-day delivery at over 1,300 Home Depot locations.

The company also has delivery agreements with Tractor Supply, Best Buy and Advanced Auto, and this summer reached an agreement with Bed Bath & Beyond BBBY and buybuy BABY.

Founded by Marc Gorlin, Roadie was born out of a bad experience he had trying to buy tile from a manufacturer. When the tile arrived, it was in pieces, and while Gorlin knew a nearby warehouse had replacement tile, there was no immediate way to get that tile to his house.

Read: On-demand delivery: ‘What Amazon started, COVID finished'

Read: UPS mulling same-day delivery service with contracted drivers — CEO

"I knew there had to be someone already making that trip who would be more than willing to throw my tile in his or her trunk for $20. From that problem, Roadie was born," he told FreightWaves in 2018.

In June, new UPS CEO Carol B. Tomé said the company was considering the launch of same-day delivery service, suggesting it may go outside its network.

"We don't have this all the way figured out, but we have a team of people looking at it," she said at the time. "There's an opportunity there that's very different [from what] we've done in the past."

The pandemic increased the demand for Roadie's services. Gorlin told Modern Shipper the company grew fourfold in 2020, adding over 5,000 store locations to now service over 15,000 locations. The company claims 98% successful delivery and has 200,000 drivers in its network covering 20,000 U.S. ZIP codes.

"Roadie thrives on episodic use of our drivers and with that, it allowed us to scale more easily during the pandemic," he said. "We had days where it was 2,000% or 3,000% higher [volumes] than it might have been before the pandemic."

Click for more Modern Shipper articles by Brian Straight.

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Image by Mikes-Photography from Pixabay

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