Schneider National Inc. is getting out of last-mile delivery for home appliances and other oversized goods. The company ventured into the business as a reaction to the growing popularity of e-commerce, but three years in, Schneider admits that the venture has not worked out for them.
On Thursday, the carrier announced that it plans to wind down its First-to-Final-Mile (FTFM) business by the end of this year.
“This decision followed a careful assessment of the near and longer-term prospects and alternatives,” Mark Rourke, Schneider’s chief executive, said in a statement.
Logistics experts say home delivery is especially difficult for trucking companies that are more focused on industrial distribution.
“They see the growth of e-commerce as a potential opportunity, but it’s not that simple,” said Cathy Roberson, a founder and chief analyst at Logistics Trends & Insights LLC. “Bringing one of those big trucks into a residential neighborhood is not like backing a truck up to a loading dock. These deliveries take time and they’re costly. That’s why you see so many companies looking at self-driving cars and robots to take over the last mile.”
“I’ve seen estimates that 25% to 30% of logistics costs from online commerce deliveries come from the last mile,” Roberson said.
Schneider said that the shutdown of their FTFM business will affect 26 terminals, but hopes to place the affected workers in other parts of the company.