The Wall Street Journal reports FedEx to Deliver Packages 7 Days a Week.
“Online shopping is seven days a week,” FedEx President and Chief Operating Officer Raj Subramaniam said in an interview. “So there is increasing demand from online shoppers and e-commerce shippers for seven-day service.”
The package giant, which only recently added Saturday ground deliveries, plans to offer seven-day residential delivery in the U.S. next year as it seeks to capture more of the e-commerce surge.
Fast Moving Target
What’s it all about? Competing with Amazon.
For two years, people could get many items overnight with Amazon Prime. The number of items available for overnight delivery has soared.
FedEx was forced to compete, but Amazon is a fast moving target.
30-Minute Drone Delivery Coming UP
Please consider Amazon’s Drone Delivery Program is “Taking Off”.
Today at Amazon’s MARS Conference (Machine Learning, Automation, Robotics, and Space) in Las Vegas, they unveiled their latest Prime Air drone design.
Amazon has been hard at work building fully electric drones that can fly up to 15 miles and deliver packages under five pounds to customers in less than 30 minutes.
And, with the help of their world-class fulfillment and delivery network, Amazon expects to scale Prime Air both quickly and efficiently, delivering packages via drone to customers within months.
Drone Delivery
https://www.youtube.com/watch?v=3HJtmx5f1Fc&feature=youtu.be
Latest Drone Features
- Hybrid design can do vertical takeoffs and landings. It can also switch from vertical-mode to airplane mode, and back to vertical mode.
- It can detect both stationary and moving objects as well automatically avoid power lines.
- It is independently safe. It will not fly into a wall even if instructed to do so.
- Sophisticated AI algorithms are trained to detect people and animals from above.
- Solar power charged. Amazon’s vision is to for 50% of all shipments to have net zero emissions by 2030.
Amazon, a Godsend
Every day I see Tweets by people railing against Amazon about pay, about taxes, about putting mom and pop out of business.
It’s all good.
The ideal corporate tax rate is zero, so don’t blame Amazon.
If Amazon puts mom and pop out of business, that’s a good thing too.
Everyone will so get deliveries in hours instead of days. How is this not a good thing?
Standards of Living
Amazon improves standards of living. Competition in general does that as well.
Sorry mom and pop, campaigns to save the local bookstore make no economic sense.
Companies that cannot compete go under, no matter what the business.
We should all cheer Amazon.
US Innovation
Please notice what country produced Amazon, Google, Uber, Microsoft, etc., etc.
Despite serious economic flaws, the US is still the global technology leader.
Why?
EU rules and regulations are staggering. In the name of “fairness” the EU would break up Amazon, Google, and Microsoft.
China lags as well. Command economies that do not have strong property rights or allow freedom of expression will ever beat out large economies that do.
Forget About China
All this talk from Peter Schiff and other US detractors about the death of the dollar, hyperinflation, China overtaking the US, and the US losing the reserve currency is complete silliness.
Wake me up when China floats the yuan, allows freedom of speech, has strong property rights, and has the world’s largest bond market.
Until then, US detractors need to stop the nonsense.
Mike “Mish” Shedlock
Another technology that, every year, is right around the corner. Self driving cars. Drone delivery. A year from now, I’ll read the exact same articles. Any day now, we’ll all be flying around with jet packs.
People pay for convenience and expediency. Never underestimate that or you’ll lose business.
And if you can wait a week, your items will be sent free.
Prime items are sent free.
I often have the impulse to click the slowest delivery option but heck, it’s there & doesn’t cost extra(beyond the Prime member fee), so why not opt for 1 or 2 day delivery.
Perhaps AMZN should have some sort of rebate towards Prime membership fee for not using expedited delivery options. i.e. When you need it 1-2 days, opt for it. Else, wait a week.
I thought consumers were so ‘tapped out’ and millenials had ‘record student loan debt”.. The thing is Amazon & Uber are only accessible by using a credit card (and with that paying interest of 15% – 25% APR). Does everyone really need the newest Iphone and Macbook pro every year (each costs double what it did 10 years ago) or pay $150 for a pair of jeans that are worn once (and lose their value faster than a new car)? How do people suddenly have all this disposable income where the median home price is now 5 – 10 times the median income in most cities in the USA and if you rent paying $2,500 for a one bedroom apartment in the suburbs where there is no public transport to speak of is the new normal
For two years, people could get many items overnight with Amazon Prime. The number of items available for overnight delivery has soared}}}
sure and you pay extra for that service.. The post office has also offered express mail delivery & package delivery if you need to ship a package or letter to someone within24 hours..
I think it is called ‘express mail’ or priority mail express’. It only costs $25 I think to stick letter in envelope than stand in line at the post office (and if you are from NYC seems everything outside of NYC is sullowww, and people move so sullooowllee)..
I think fedex offers the same type of service and both have offered this concept of ‘overnight’ delivery for I think the past 25-30 years so what is so innovative about being able to receive something from Amazon overnight –do they offer it to prime customers at no extra cost?? NOT
Another Amazon shipping post?! Mish, I haven’t see anything in your posts about why Amazon should be particularly good at shipping, much less better than UPS and Fedex. There is no theoretical advantage to Amazon doing their own shipping. Economies of scale come from horizontal integration, not vertical. e.g.: It makes sense for t-mobile to buy out Sprint. It doesn’t make sense for T-mobile to buy out a chip maker, even though chips are used in the phones they sell.
Any factual data that Amazon would do it better? Did they hire top talent from UPS or Fedex? Some specific technology advantage you can cite? (A few drones is not a technology advantage) Or is Bezos just an incredibly multifaceted genius?
What you’re not seeing is the future potential iteration of this class of tech. All you see is shipping. Who knows where this goes next.
Lets see …
By your logic, to beat Mom & Pop stores, they needed to hire top talent from them and be better than them.
Or, they could do it differently and suddenly, M&P disappear.
Likewise, to beat FedEx, you don’t hire their top talent (who can only advise Amazon on a better mousetrap since they are conditioned that way) and try to be incrementally better.
You bypass them with a whole new approach which would leave the oldies stranded as they can only adopt Amazon’s approach, which automatically puts Amazon in the driver’s seat.
In the days of prop driven planes, to outdo each other, the designers did incremental improvements here and there to eke out a few more km/hr over the opponent.
Till suddenly, a Jet engined plane zoomed in and left them all in the ditch.
Disruption has to be radical and come from a completely unexpected direction. You can’t outdo the best on their own turf.
I was asking for data to show why Amazon could do shipping better/more efficiently than their suppliers/competitors.
That might be hiring top talent away from them. It could be holding a portfolio of patents.
I want to know how the “Amazon Shipping” business model is better than it’s competitors.
If Amazon announced they were going to compete with Exxon in the oil and gas business, wouldn’t you want to know why they think they can do it better?
Companies rarely excel beyond their field of expertise. That’s why farmers don’t make their own tractors. That’s why Boeing and Airbus don’t make their own engines.
Well then why does Walmart have its own delivery fleet? By your logic they should be using UPS or FedEx. Or the USPS.
Why does Apple design their own chips for iOS devices when obviously Intel can do it cheaper? Hubris? Why does Comcast design their own set top boxes? Technically they aren’t manufacturing the actual processors, but either of these companies could buy out their supply chain if they wanted.
Again, I am asking why Amazon can do shipping better.
And reasons for my skepticism that they can.
I’m asking for some evidence to think that Amazon would be better at it. e.g. If you told me Amazon had 200,000 delivery drones being built right now, and the FAA has granted them exclusive use of some section of airspace, then you could convince me that Amazon can do hi speed/hi value delivery better than anyone else.
Why does everyone need their item(s) in 30 mins? WTF is this? Domino’s pizza?
Dominos pizza is crap but seems like everyone in middle america loves it (along with Wal Mart)..
Domino’s is crap. Make your own with the best ingredients. We just did that for dinner this evening.
Not just middle America, ALL of America. Pure garbage for pure garbage.
Once I discovered the 50¢ pizza dough mix at the supermarket I stopped ordering delivery pizza. Then I figured out that it’s just flour and a little yeast and a pie got even cheaper.
Then I realized my lifestyle doesn’t require 10,000 calories a day and quit carbs, but that’s another story…
The faster you can get it out of the warehouse and through the delivery chain the better. Every item in transit is a potential liability. Once it is out of your hands it becomes someone else’s problem.
How many million drones will be needed?
BTW I had to return a pair of pants, not to Amazon, via fed ex. The shipping costs were $23 , so I took the fedex box to USPS and had it shipped for <$10. I don’t see how or why anyone would use fedex, their rates are not competitive with USPS.
I wasn’t aware that social media allowed free speech. It had looked to me that big tech was making speech less free.
Let’s quit subsidizing Amazon shipping and let the drones do the job.
For the rest of the deliveries, they can use the Tesla self driving vehicles.
What could possibly go wrong?
I bet they will want some limitations on liability.
Hey, for liability, yet another business opportunity for Amazon. Sell insurance (like Tesla)! 🙂