Did you read the last Milkman’s Newsletter? If you didn’t, you should. You’ll find it here.
It contains one of my favourite headlines of the year – Busy Jeff and the Lost Key. I like it because it talks about a potential issue with Amazon Key, which I predicted (in this column) would not become a best-seller; I have just enough ego to like something that seems to support one of my opinions. But I mostly like the headline because it’s funny, and because it sounds like a story I would like to read – maybe it’s about a mouse called Jeff who is so busy he loses his key and has to learn to slow down and be less stressy. A modern-day story we could all learn from.
But that wasn’t the newsletter item that really caught my attention. No, what really caught my eye was the piece about the environmental costs of fast delivery.
Writing for Huffington Post, the environmental journalist Laura Paddison, looked at some research carried out at the University of California, Davis. The research found that: “Since 2009, US Postal Service deliveries have increased by 65%. As the holiday shopping season approaches, it’s estimated that online sales for November and December alone will hit $107.4 billion.”
Those are, of course, US statistics. But I think it’s a reasonable assessment of the trend across most of the developed world.
There are too many advantages and benefits of eCommerce for me to waste your time and my own listing them here. But you can have too much of a good thing, apparently.
The researchers at UC Davis were able to conclude that the shorter the chosen delivery timescale the greater the potential harm to the environment. This is a problem that stems from something we all already know; transport efficiencies. And with the increasing availability of fast delivery, along with customers’ increasing demands to have their items NOW, it’s a problem that isn’t going to go away by itself.
B2B delivery services have been the Cinderella of the fulfilment world for a long time – a bit dirty and not very glamorous. That’s changing though, right..? Because if there’s one thing those B2B players know about, it’s running sustainable same-day delivery services, whether it’s spare parts for car repair or timber and cement to a construction site. Same-day is really hot right now in B2C, too.
But when you’re rushing to make deliveries several times a day, your costs could outrun your profits if you’re not able to consolidate your delivery runs and schedule the best, most efficient routes for your drivers. Suddenly things feel boring and not-very-glamorous again, don’t they? But these details are important – even to B2C delivery startups that are too cool to spell their names properly.
You see, the danger for B2C players in this brave new world of hurry up and deliver it is that you let the tail wag the dog. Sure you need to be responsive to customer demands, but not if that means operating a financially unsustainable model. You need to maximise the commercial potential of every vehicle, every cubic metre of storage, and every member of your team.
But you can only do that when you know where all of your resources are at any given time and how those resources are being used. Then you can start to make informed decisions. If you have trucks that are 40% empty, should they even be running? What’s the cost to your business of shipping all that empty space from A to B and back again? What would the overall cost to your business be if you didn’t do that? Would you lose revenue or save costs? Which runs can you combine? Which routes should you modify?
There are plenty of examples of startup businesses with great-sounding ideas and silly-sounding names that don’t scale or that can’t turn a profit. Here’s a great-sounding idea from me – don’t become one of them.
And, of course, the other potential winner – if everyone stopped sending out more vehicles than is absolutely necessary – will be the environment. That can only be a good thing for everyone.
