UPS is expanding its 3D printing service for online merchants from the US to Asia and Europe, reports Reuters. In a partnership with 3D printing company Fast Radius, the service lets UPS 3D print plastic parts in its own factories for online merchants and deliver them to e-commerce customers, rather than e-tailers having items manufactured first and then sending them to UPS for shipment. UPS’ decision to invest more resources into 3D printing puts it ahead of a potential threat to its business as the technology makes its way into retail.
Offering 3D printing services gives UPS a way to offset a potential loss in business. As retailers look to 3D printing to cut back on manufacturing and warehousing costs, the technology also poses a significant threat to transportation and logistics companies, like UPS. The company currently receives a portion of its revenue from storing and shipping parts for manufacturers. Offering a 3D printing service could put UPS ahead of the chance that these manufacturers turn to the technology themselves, eliminating their need for UPS to store their items.
A 3D printing service can help UPS maintain revenue from storage, and can also give them a new revenue stream from printing fees. This service could gain traction because it gives e-tailers an attractive option for shipping out tiny, plastic products for online orders. It can help these retailers cut back on manufacturing costs when they do not have to go through a third-party before storing it with UPS for shipment.
3D printing could become a widely adopted technology in retail. The technology allows online merchants to cut back on unnecessary inventory costs by only producing items as they are needed, and can also speed up fulfillment for items that can be 3D printed on the go. For example, Amazon — whose logistics developments pit it directly against UPS — filed a patent in February for delivery trucks outfitted with 3D printers allowing drivers to 3D print orders in the back of the truck. Despite this differentiated application of the technology, UPS’ newest expansion puts it ahead of Amazon as it has only filed a patent for 3D printing in the US so far, while UPS is expanding into new markets.
In order to keep this lead, UPS should emphasize e-commerce as a way to grow this division of its business even further.
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