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Originally posted January 16 2025 by Max Garland in Supply Chain Dive
The new delivery offering aims to compete with the U.S. Postal Service as the agency hikes rates on lightweight packages.
Veho has rolled out a new “Premium Economy” service, the parcel delivery provider announced Wednesday.
The service provides delivery in two to five days, compared to the company’s typical next-day and two-day speeds. Veho highlighted three customer categories — lightweight consumer product sellers, subscription brands shipping non-perishables and 3PLs — that could particularly benefit from the offering.
Through Premium Economy, Veho aims to capture sub-one pound parcel volume pressured by rate hikes from the U.S. Postal Service and delivery options that have historically used the agency like UPS SurePost, Veho CEO Itamar Zur said in an interview with Supply Chain Dive.
Select Veho clients had been testing the service prior to the launch, with positive results in terms of cost and service quality, according to Zur. With more relaxed speed standards versus Veho’s other service, the company can deliver packages on days that are more cost-efficient operationally while passing the savings on to shippers, he added.
“We’re able to bring very competitive rates, and that’s really important for a category that really depends on low prices to make ends meet, right?” Zur said. “If the margin of the product is low, then you have to have really good shipping prices.”
Premium Economy volume enters one of Veho’s six regional hubs in Philadelphia, Atlanta, Dallas, Cincinnati, Chicago and Orlando, Florida, via pickup or direct injection, he said. Technology advancements have helped the company account for different service levels and adjust the flow of packages accordingly, which paved the way for the service’s launch, according to Zur.
“Our technology allows us to prioritize when we get injections in our warehouses to be able to scan and then prioritize what comes out first, what comes out second,” he said.
The introduction of the Premium Economy service comes during a period of expansion for Veho. The company announced launches in several new markets last year, including Detroit and Columbus, Ohio, and has inked partnerships with the likes of Flexport and ShipWise. Veho will reveal its plans to expand into more markets later this year, Zur said.
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