• on Dec 9th, 2013 in Ideas Worth Exploring | 4 comments

    Today’s consumers are a demanding bunch – expecting to get what they want precisely when and where they want it.

    These changing expectations are putting the pressure on both brick and mortar retailers as well as online retailers. Pressure grows to deliver goods faster, cheaper, and with more flexibility. Now, customers expect free shipping and overnight delivery or, in some cities, same-day delivery.

    It seems same-day delivery might not be fast enough for some. Amazon.com is toying with the idea of delivering packages within 30 minutes – via drone.

    In an interview on a recent CBS “60 Minutes” news program, Amazon.com CEO Jeff Bezos discussed his Prime Air unmanned aircrafts, which he claims carry packages up to 5 pounds – the weight of most parcels Amazon.com delivers – and have a range of about 10 miles. This could make them viable in more densely populated areas. Bezos thinks he could get this service up and running in about 5 years.

    So is all this drone delivery talk just pie in the sky or a potential delivery path worth considering?

    The technology is getting there. It’s already being tested in other parts of the world. In Australia, a textbook rental company, Zookal, plans to use drones to deliver textbooks to students as early as March 2014. Meanwhile, Silicon Valley startup Matternet is testing drone delivery in Haiti and the Dominican Republic and sees the potential for using these small, electric crafts to deliver goods in populated areas where they can make multiple deliveries within their limited range of a few miles.

    But it’s likely to be some time before U.S. skies look like something out of “Star Wars,” with thousands of small, autonomous aircrafts zipping around and dropping packages at our doorsteps. The Federal Aviation Administration (FAA) isn’t moving too quickly to open the skies for commercial drone purposes, and understandably so. The thought of unmanned vehicles flying in areas with lots of air traffic raises significant safety concerns.

    Still, innovation is all about experimenting. Many people in the late 19th century thought the light bulb would never catch on. What are your thoughts on these delivery drones? Is driver-free, aerial delivery the answer to the growing demands of consumers? Is this a feasible option for the Postal Service in the coming years? Or could it be more like the Postal Service’s ill-fated test of “rocket mail” from the late 1950s where a cruise missile loaded with mail launched from a submarine? That experiment didn’t gain traction. 

  • on Sep 16th, 2013 in Delivery & Collection | 7 comments

    As online shopping has become the norm for many Americans, it has brought operational changes to both brick-and-mortar retailers and online retailers. Shipping costs are now a major consideration for companies. Retailers are working to control their shipping costs as their ebusiness grows, with the traditional retailers relying on their extensive network of stores to reduce shipping costs. Instead of shipping goods from centralized warehouses to far-flung customers, major retailers, such as Wal-Mart, Best Buy, and Gap Inc., deliver from stores close to their customers whenever possible.

    Amazon.com is focused on building more local warehouses and is also investing in its own delivery fleet. Other retailers have made merchandise available to eBay to sell in select cities with its same-day delivery service, eBay Now. Shipping merchandise from locations close to where customers reside allows retailers to save on shipping costs, which are set based on the distances shipments travel.

    Customers are expecting ever higher levels of service. Same-day delivery to a growing number of customers helps retailers provide customers something close to the immediate gratification of an in-store purchase. So far, however, this service has been limited to customers in cities where a decentralized network can serve them.

    While lower shipping costs is good for the retailer and its customers, the shipping giants are likely to feel the pinch. One retailer’s reduction in shipping costs is a courier company’s reduction in revenue. Ultimately though, these e-commerce shipping strategies should improve the online shopping experience and accelerate its growth, which will boost the number of packages sent. That’s a boon for all package delivery companies, including the Postal Service.

    With its reliable delivery network that serves every address in the United States, the Postal Service should be well-positioned for this shift toward fast, local delivery of online purchases. However, some challenges in its network processing capabilities and delivery operations could hinder its ability to capture a larger segment of the package delivery market. What ways could the Postal Service capitalize on these trends? What improvements does it need to make to position itself as the leader in shipping services?

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