🔒E-commerce boom boosts courier service providers, including West Hartford’s ProCourier Inc.

Over the past two years, e-commerce and health care have been among the two fastest-growing sectors in the U.S. amid the pandemic.

But the massive uptick in package home deliveries and transport of medical supplies and test specimens has also been a boon to another industry: last-mile courier service providers, which have seen demand for same-day deliveries skyrocket, even as office-based shipments took a hit in an era of remote work.

For Michael Gualtieri, president of West Hartford-based ProCourier Inc., a same-day delivery service company he founded in 1997, the pandemic has fueled record-setting sales.

“We’ve been growing at 8 to 10% a year over the past [several] years, but the past two have seen our sales double,” Gualtieri said.

That’s largely been driven by healthcare companies that comprise, he estimates, 40% of ProCourier’s clientele. The company also has offices in New Haven, Stamford and Boston.

Gualtieri said he remains bullish about future growth. Last month, he finalized an acquisition of Hartford Courier, a delivery company located in downtown Hartford. Terms of the deal were not disclosed, but the move reflects the need to diversify revenue streams amid an increasingly competitive and technology-driven landscape.

Having a city-centered presence is particularly important for timely pick-up and delivery, he said.

“Being [in a downtown location] can cut in half our response time,” Gualtieri said, noting that’s a significant issue, especially since ProCourier largely provides one-stop deliveries.

Same-day deliveries

Research from EFT, which tracks the supply chain and logistics industry, found that “delivery efficiency” was the top concern (25%) of clients, outpacing issues like cost (13%) and “end customer interactions” (10%).

Client demands — in an age of speed and convenience — have elevated both the expectations and pressures on courier services.

Steve Howard, president of the Customized Logistics and Delivery Association (CLDA), which includes nearly 3,000 members, said customer feedback in real time has greatly changed quality control and the delivery experience.

“Today, every delivery … is accompanied by an email survey,” Howard said. “If [a courier company] isn’t doing its job well, it can [reflect poorly] on both the delivery provider and the client [company].”

One of the primary expectations of clients these days is same-day delivery, Howard said.

At the same time, many consumers also expect free shipping: More than 60% of EFT survey respondents said they were willing to cancel an order without it, and 24% of consumers said they were willing to spend more on purchases to qualify for free shipments.

Those expectations have created a need for upgraded technology to provide greater efficiency and predictive scheduling in the global last-mile delivery market, which is projected to grow annually by 9% from $108 billion in 2020 to more than $200 billion by 2027.

“A few years ago, giving a customer a four-hour window for a delivery was [acceptable], but today [customers] want that narrowed to an hour or two,” Howard said.

The continued investment in technology and data metrics has, in part, been a factor in the number of mergers and acquisitions in the courier services industry in recent years, says Jason Burns, first vice president of CLDA and director of corporate development at Dropoff, a delivery services and logistics company with locations in 38 cities nationwide.

Burns is responsible for mergers and acquisitions at Dropoff, which purchased his family’s New Orleans-based small courier service company in Sept. 2020.

Despite the uptick in business his company experienced during the pandemic, Burns said it needed more capital to sustain growth long term.

“There’s a lot of consolidation in the industry with larger national companies [acquiring] regional players,” Burns said. “As a small company, it’s getting harder to compete.”

The larger regional or national footprint, Burns said, also provides a greater value-add to clients in multiple markets.

“If a company serves 20 markets, [customers] can see [the shipping/delivery] for each of those markets through one dashboard, which provides greater transparency [vs. using multiple couriers],” Burns said.

And it’s not simply traditional parcel delivery companies accounting for an increasingly competitive landscape. The logistics and delivery sector has also attracted billions in venture capital in recent years including drones and autonomous vehicles.

Timely service

While ProCourier’s Gualtieri understands that new technologies — and the future of urban-centered workforces and remote work — will continue to evolve coming out of the pandemic, he said providing peace of mind and timely service remains critically important, particularly in the growing medical industry that his company plays in.

It has also placed a premium on finding quality drivers, which Gualtieri said has been the biggest challenge over the past couple of years.

Given the professional clients ProCourier serves — from medical practices to Fortune 500 companies — he said the appearance and professionalism of his roughly 50 drivers, who work as independent contractors, is particularly important.

Despite the growth in home deliveries, Gualtieri said he remains committed to serving the business-to-business market, which has seen a slow down in certain sectors like law, where electronic filings have reduced the amount of physical documents that need to be shipped.

But with manufacturers and medical clients in high demand, he said he’s optimistic the boon will continue.