SCDigest's Weekly eCommerce and eFulfillment Bulletin

Can't View in Email?

Amazon Testing Delivery by Taxis

The Wall Street Journal reports that Amazon.com has been testing using commercial taxi services for same day deliveries.

For its recent tests in the - where else - San Francisco area plus Los Angeles - Amazon joined with Flywheel Software and its cab-hailing mobile app.

Amazon summoned cabs through the Flywheel app to mini-distribution centers before loading them with as many as 10 packages bound for a single ZIP Code, paying about $5 per package for delivery within one hour, according to the Wall Street Journal sources.

The Flywheel deliveries were typically done in the early morning when the cabs had fewer fares and were less likely to be noticed by customers and competitors.

Of course, this comes after Amazon tests of its own delivery fleet, tests with the USPS, flirtation with delivery drones and more.

The WSJ quotes Forrester Researcher analyst Sucharita Mulpuru saying that Amazon may be developing a "same-day delivery algorithm" designed to evaluate a variety of delivery services at any moment, based on which is fastest and cheapest.


Newsletter Made Possible by:

The industry's most powerful Distributed Order Management (DOM) System

Unparalleled control over inventory allocation to
power complex omni-channel fulfillment- Softeon DOM



Parcel Shipping Costs May Rise Sharply in 2015

UPS as usual matched rival FedEx with plans to increase base parcel shipping rates by 4.9% on average for deliveries starting in late December.

That's business as usual for the parcel giants, and is really just the starting point for negotiations - at least for large and some medium shippers.

But this year, the impact of the standard general rate increase will be exacerbated by expansion of so-called "dimensional weighing" programs, also set to take effect at the start of next year. Dimensional weighing is basically a way for the carriers to be able to charge both for the weight and for the cube of a parcel - whichever is more in the carrier's favor.

Dimensional weight is determined by first multiplying length by width by height in inches, thus calculating a parcel's cube.

That number is then divided by 166 for domestic shipments, and by 134 for international freight.

That number is the "dim weight." If the package weighs more than the dim weight, the shipper pays based on the actual weight. If the package weighs less than the dim weight, the shipper is charged for the more expensive dim weight instead - a price increase versus the traditional policy of charging based on weight alone.

So for example, a box that is 12 x 12 x 12 (inches) has 1728 total cubic inches. Divide that by 166, and you get 10.4. If the package weighs 12 pounds, the shipper will pay the rate for a 12-pound shipment. If the package weighs 8 pounds, the shipper will pay for shipping a 10.4-pound box.

Between the general rate increase and the effective increase from dimensional weighing, some parcel shippers could see rates rise by high single or even double digit percentages. Ouch.

But remember - everything can be negotiated.


Walmart May Match On-Line Prices at Store

Walmart has long matched local competitor prices at its brick and mortar stores, but is now considering taking the practice to on-line pricing as well this holiday season.

Retail industry experts say that matching on-line rivals such as Amazon.com could make the discounter more competitive, but cut into earnings.

A Walmart spokesperson said store managers have had discretion to match certain on-line prices for customers for some time, although Walmart has not been touting that policy, as it has with the local price match service.

Retailers such as Target and BestBuy have already adopted on-line price matching of one form or another over the past couple of years.

Last April, Walmart rolled out an on-line and mobile tool called Savings Catcher, which analyzes a shopper's receipt and refunds price differences found between Walmart's prices and those of local competitors. The new test would expand that automated price match program to at least some group of on-line rivals as well, rather than relying on a customer to request the price match from a manager.

Best Buy Chief Executive Hubert Joly last year said he thought the cost of price matching eventually would come down, as the gap between prices in stores and on-line narrowed.


Sears Exec Calls for Next Generation Distributed Order Management

At the CSCMP annual conference in San Antonio at the end of September, Jeff Starecheski, VP of Logistics at Sear, gave a an interesting presentation on the future of omni-channel retailing/fulfillment.

Starecheski offered a series of sort of "must haves" going forward for successful retail efuflillment, which included having "one giant pile" of inventory from which all channels at a company can access - but interestingly not necessarily at the same cost/service across all channels. A total "24 x 7" mindset must be developed, he said, with dynamic customer order promising and dynamic order routing available in real-time, all the time.

And he sees lots of innovation coming in last mile delivery, saying that while UPS and FedEx will of course be huge players, they won't be the only ones in the mix, seeing for example real possibilities in Uber or an Uber-like service to make customer deliveries, especially for orders needing delivery in just a few hours at manageable costs.

He also predicts a new generation of Distributed Order Management systems (DOM) that will go well beyond selecting optimal sourcing points for individual orders to optimizing a broad array of choices for both consumers and retailers - he calls what is coming "COOL," for customer order orchestration layer.


Send Feedack
Copyright SCDigest 2014. All rights reserved.