newsworthy
Parcel consolidator
Streamlite shuts down
Streamlite Inc., an Atlanta-based company that
aggregated small parcels for businesses and
deposited them into the U.S. Postal Service (USPS)
network for low-cost deliveries to consumers,
abruptly shut its doors June 14 after it lost what it
called a “critical customer.”
Streamlite would not identify the customer, but a
parcel industry source said it was CVS Caremark,
the Woonsocket, R.I.-based pharmacy benefit man-
agement titan that mails out thousands of prescrip-
tion drug shipments per day. The source said
Streamlite lost the CVS Caremark business to UPS
SurePost, the unit of Atlanta-based UPS Inc. that
provides what are known as “parcel consolidation”
services.
Like other parcel consolidators, Streamlite picked
up clients’ shipments, calculated postage, sorted the
packages for the proper postal facility, and entered
them into the postal network for final delivery.
High-volume mail order companies and e-commerce merchants like the model because they are
able to obtain low USPS rates for their bulk shipments. However, parcel consolidation services don’t
command high margins, and market penetration
by the three big parcel players—UPS, FedEx Corp.,
and DHL—has put further pressure on the smaller
players that once made up most of the provider
universe.
All three of the big parcel players are experiencing rapid revenue growth in the category, driven by
the equally rapid growth of business-to-consumer
e-commerce services. For example, FedEx
SmartPost, the consolidation business of FedEx,
said average daily volume in its fiscal third quarter
rose 13 percent over the year-earlier period.
Revenue per package increased 5 percent year over
year, primarily due to increased fuel surcharges,
FedEx said.
Streamlite delivered between 200,000 and
250,000 packages a day and had annual revenue of
about $200 million, according to data from investment firm Stifel, Nicolaus & Co. Shipments already
in the postal pipeline will be delivered to consumers. But the fate of shipments still in
Streamlite’s possession is unclear.
Streamlite was in business for seven years. The
announcement of its closure appeared as a terse
paragraph on its website. ;
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