Roadnet Technologies, a subsidiary of United Parcel Service that concentrates on solving logistical problems associated with home delivery, will license hardware and software systems to the grocery companies to help provide their customers next-day or same-day delivery, the company announced today.
"Companies compete on their ability to execute and often within a very tight margin environment," Len Kennedy, Roadnet's chief operating officer, said in a statement. "We're committed to helping consumer direct companies achieve efficient fulfillment--all while offering the time savings and convenience that Internet buyers are seeking."
In the rush to offer online customers faster delivery, Internet grocers are looking for every edge to keep costs low and customer service high. Many analysts have predicted that these upstarts would look to experienced shipping companies such as UPS and FedEx for a solution.
Roadnet will supply daily routing and scheduling software systems as well as a wireless communications system that enables companies to track shipments and communicate with delivery people.
Albertsons.com and HomeGrocer.com, along with GroceryWorks.com and Streamline.com, are hoping Roadnet's technology will help them compete with leading online grocers San Francisco-based Webvan and Skokie, Ill.-based Peapod.
A new crop of online home-delivery companies pose a threat in this market as well. Brick-and-mortar grocer Pink Dot and New York-based Kozmo.com--which offers videos, CDs and convenience goods--promise to deliver goods within an hour.
Internet study group Forrester Research estimates that Americans will buy $7.3 billion in groceries online by 2003.
In September, UPS raised $5.47 billion in a public offering, the largest amount ever raised in the United States.