United Parcel Service should develop a win-win-win strategy combining Teamster drivers, UPS Stores and Roadie gig workers to stay competitive in the shrinking e-commerce market, reports New York's FreightWaves.

UPS built its reputation on a strong B2B parcel delivery model, paying unionised drivers top wages while maintaining lower costs. But the parcel market has shifted, with lightweight B2C e-commerce now representing more than 70 per cent of volumes, making traditional van-based operations too costly.

FedEx Ground, which grew from RPS's independent contractor model, has shown how lower-cost structures can succeed. UPS, as the only unionised private parcel carrier, faces greater challenges in halting the loss of B2C business to retailers and startups.

Analysts say UPS should combine the strengths of Teamster drivers with lower-cost last-mile agents using personal vehicles, a model it already knows through its 2021 acquisition of Roadie. Roadie specialises in deliveries from neighbourhood stores to nearby consumers.

The proposed innovation would see Teamster drivers deliver parcels to more than 5,600 UPS Stores nationwide, acting as middle-mile hubs. Gig workers would then handle final-mile delivery within a five-to-10 mile radius, reducing costs and avoiding long commutes to sortation centres.

This unified model could replace reliance on the US Postal Service, which UPS dropped in January over rising prices. With UPS Stores as pick-up points and gig workers for final delivery, the carrier could eliminate postal workshare products and cut costs tied to 25 separate facilities.

Time is critical, with FedEx also urged to adopt gig worker models. UPS already owns Roadie's network but must secure Teamster cooperation to move lightweight, low-value e-commerce shipments. Franchisees of UPS Stores are expected to embrace the model to grow their businesses.