Saturday, August 20, 2005

Shipping. We used to walk uphill in the snow.

Tom Peters talks about how the good folks at Fed Ex should wake up every day and be thankful they have such a great competitor in UPS. Ditto, UPS. Throw in DHL, USPS and others. These organizations have been having at each other for a good long piece now. Service is way up, as is ease of use. You, my enterprise friend, are in a lovely position to reap the benefits.

I'm a guy that builds biz models around shipping. It's just my own take on things, but I believe you can lead a much more sustainable life when you don't have to move your service or your product through your own 3D retail location. You can and should use the retail locations of other partners in your food chain, but I've always liked positioning ourselves far enough upriver that much of our production can just be shipped out.

Many people will love having their own retail exposure. It's just not been my gig. If you have a well executed retail presence in ANY market you will attract many great (and lousy) producers and vendors. Those of us without your value added access to your end users need your distribution and marketing skills. You make the place better by appropriately moving our stuff to those who need it.

However, not all of us want to be in 3D retail. For the rest, I'd suggest you focus on the amazing shipping grid the world has laid at our feet.

Physical shipping will add cost but what's a retail outlet going to cost? What are regional offices going to cost? What will staffing, insurance, rent, heating, cooling, and all the rest cost?

Think of the global shipping grid as a big slow motion internet. It's readily accessible without much training. You can get stuff to and from almost anywhere. Its utility for small enterprise has grown from almost negative value to ubiquitous through the economic evolution of the last few decades. You can and should take full advantage of it with relative ease. You can grow your own sustainable enterprise on the back of a knowledge and logistics grid the likes of which the planet has never seen. This tool, like the internet, is just laying out there essentially free, until you need it.

Back in the day, 20 - 25 years ago, trying to work the global shipping grid as a small enterprise was one gnarly ass task. It was set up for high volume shippers. Little guys got chewed up and spit out. Overnight and expedited shipping was proportionally much more expensive. Shipping out of the country was close to brain surgery. If something needed tracing, you'd spend hours on the phone. If something got lost, good luck.

Now the smallest enterprise can order a single pickup and delivery from their computer, know the cost in advance, predict accurate delivery dates, see and capture a record of who signed for it, what time they signed, and get instant traceability on a mess of other metrics. This is available to you from multiple vendors who are all killing themselves to make it easier to do business with them. The capabilities built into the shipping grid now are pretty amazing. And they keep getting better.

One of my favorite writers, John McPhee, wrote a great article about UPS in the New Yorker, April 18,2005. Get this... "Every night around the network UPS has something like thirteen airplanes and thirty-two crewmen ready but unassigned. They sit and wait for trouble to arise, like pilots in the Swiss Air Force, whose planes are hidden inside the Alps, always ready to emerge, in times of need, through camouflaged doors in the sides of the mountains. The UPS term for this is "hot spares". In Louisville or elsewhere, the light lights up, a siren goes off, and a loudspeaker says, "Activate the hot spare!" Hot-spare crews report to work each evening and go out to the ramp to pre-trip their plane. Then they wait. They arrive at seven and go home at three in the morning. If they are triggered by a call to "replace a mechanical" or "rescue that volume!", they have thirty minutes to get their plane off the ground. When the hot-spare light is red, mechanicals are the most common cause. In all its years of flying, UPS has never lost an airplane."

As you're reading this, this kind of evolution of the shipping grid is growing quietly all over the world. It's not costing you a single penny right now. You'll only need to pay when you use the tool, and then, you'll have a bunch of great providers working hard for your business.

Start ups and emerging enterprises don't typically get this treatment.

Take advantage of it.

John McPhee




USPS US Postal Service

Tom Peters

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