It’s the best of times, it’s the worst of times, it’s the age when you can order toothpaste and tires on your phone and get them delivered within hours. What a time to be alive! E-commerce is more popular than ever and is projected to keep growing—just like people said about me in high school. The final stage of the e-commerce journey is last mile delivery, responsible for moving goods from a warehouse or distribution center to your very own front door.
US e-commerce sales have consistently shown upward growth. Sales were up 9% in 2023 and they’re projected to increase another 11% this year, setting a new peak at $1.22 trillion. Packages are getting delivered y’all. Delivering these packages in record time is the result of persistent innovation across the entire logistics network—from material handling and inventory management to strategic warehouse placement and freight planning.
Last mile delivery remains the most stubborn part of the supply chain because there is simply no way to automate or substitute someone physically taking a package from a distribution center and bringing it to your door (not yet anyway). As a result, last-mile companies are expanding their fleets to provide fast and reliable delivery. This kind of inventory bulk has had a rippling effect on the commercial van rental market, impacting the availability of vans for non-delivery companies.
The Ripples That Ravage
During peak delivery seasons, such as the holidays or your mom’s birthday, last-mile delivery companies suck the van market dry, making it challenging for other fleets that rely on van rentals, such as contractors, home services, non profits, and really any business that uses vans.
Major last-mile delivery players, such as Fedex, UPS, and Amazon, opt for long-term van rentals or leases to ensure a steady supply of vehicles during peak periods. These contracts often come with guarantees of availability, meaning that last-mile fleets get their seasonal needs prioritized over others. (Though never at the egalitarian Kingbee. More on this later.)
Think back to the law of supply and demand from Econ 101. Amazon already operates a massive fleet, but during peak delivery season they clean out all the major cargo van suppliers to account for demand. Without availability in the cargo van rental market, contractors are left in the dust and rates go through the roof.
What’s a Van Man To Do?
We’re currently entering peak season, and for non-delivery companies, vans may be as scarce as sunflowers in the desert. Without a quick & reliable source for cargo vans, fleets may struggle to complete jobs and generate revenue. The inability to provide services on time can lead to decreased customer satisfaction and a helluva pissed off boss. Fleets may be forced to seek alternative transportation options, which can severely impact productivity.
While the demand for vans during peak package delivery seasons may seem insurmountable, there are solutions that non-delivery companies can explore:
- Plan ahead: Businesses should anticipate their van needs well in advance so that they can be ready for big jobs or seasonal fluctuations in their industries. By evaluating their fleets and replacing aging vehicles regularly, fleets can secure the vehicles they need before the last-mile delivery companies book them all.
- Try EVs: EVs are like the shy guy who’s low-key jacked. They might not have the most friends but they get the job done. Large fleets often overlook EVs because of uncertainty about range and charging, but if you’re a contractor that spends most of the day at only a few locations, this shouldn’t be an issue. EVs van rentals could provide cost savings and guarantee vehicle availability.
- Look outside the major rental providers: Large rental fleets are in the business of bulk, with a bottom line that depends on volume. Small- to mid-sized rental providers may have more available vehicles due to being overlooked by multinational delivery companies. The best option may be a rental provider that looks out for the smaller guy because they are one.
Stay Proactive With Kingbee
Kingbee is a work-ready cargo van provider that allows you to quickly adjust the size and composition of your fleet with various term lengths and financing options. Kingbee is the only commercial vehicle provider that upfits and wraps in-house, which allows us to deliver work-ready vehicles to 48 states in just 2-4 weeks. Kingbee can help you quickly replace aging vehicles, expand into new markets, and scale or downsize your fleet to adapt to changing market conditions. Call today for a free fleet assessment and to hear how Kingbee can help your business navigate the seasonal van rental market.
