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Sent Items #114: Tuesday, April 6, 2021

Hi All!

Well this feels a little strange. It has been almost 3 months since my last issue of Sent Items. Many of you may have even forgotten that you subscribed. 

Thank you to those who have reached out asking if they have missed an issue to Spam. Unfortunately, no. I’ll spare you of most of the excuses, but things are busy. Many of you took the time to complete a survey where I sought feedback on what you liked and didn't like about Sent Items. The overwhelming feedback was to keep doing much of the same, or, as the expression goes, “if it ain't broke, don’t fix it!” You liked the twice a month’ish cadence. You wanted more commentary and opinions on the news. So I will try my best to heed your feedback. 

Just a severe case of writer’s block….  So here we go, trying to get back on track and using this as a mini re-launch. There have been many headlines and stories since I last sent an issue, so I am testing a slightly revised format where I will do my best to compartmentalize and capture all that I think is worthy to share.

But first, a kind welcome to all my new subscribers, and a sincere apologies for taking so long between Issue # 113 and today’s. Life has been busy, work has been busy, and I recently took on an *additional* new job of pup dad to Henry (he’s now 15 weeks and yes, he’s on Instagram):


But let’s get to the meat of things. Cheers to more regular issues of Sent Items so y’all can get your healthy, notable share of eCommerce x Logistics news!

- Matt

USPS, etc

The USPS announced their 10-year Plan [link]. Lots to cover in the plan but the underlying takeaways I gathered were that both costs and transit times are on the rise - a bad combination. The Postal Service, for many entrepreneurs and small and growing businesses is the low-cost leader. But not just that -- it is a lifeline that ensures reasonable competitiveness to much larger corporations. I’ve been chirping for years that the Postal Service is one of the greatest values in eCommerce. What you get for what you pay is unmatched. Regularly I’m seeing First Class shipments from here in Nashville to the West Coast (“Zone 8” in shipping speak) take 2 days to arrive, and all for about $3.50. The equivalent, guaranteed service from FedEx and UPS would cost upwards of $25. So it makes me very nervous of some of these short-sighted decisions that the current Postmaster General is pursuing. 

Amazon + Third-Party Shipping

Amazon will enter the domestic market as a viable third-party transportation carrier. Just like they’ve done with Fulfillment, Retail, and Web Services, so too will they enable small parcel transportation. My thoughts … my opinions. Remember, some time between Sent Items #113 and today’s, Jeff Bezos announced he was stepping away from the CEO role. Andy Jassy, the inventor and CEO of Amazon Web Services (“AWS”) will be taking the helm. Sources of mine suggest that launching a parcel solution for sellers/shippers that do not use the Amazon platform will be his first major initiative.

Relatedly, Amazon Air now makes an average of 140 flights per day and is expanding its fleet, purportedly growing to 160+ flights daily by June. That would double the size of Amazon Air in just over a year.

If you’re FedEx and UPS, you are worried, naturally (watching those stocks drop when the news hits the tape will be remarkable) but in the end I think both carriers - and everyone else - will continue seeing volume growth. There is simply so much demand for delivery services in the United States and a significant shortage of carrier supply. We need all the increased capacity we can get and Amazon is quickly developing the labor, infrastructure, and technology to close the gap. I suspect we’ll find other complimentary services like Lyft, Uber, and Doordash step on the gas in “all things” delivery.

Returns, Returns, Returns

Besides final mile delivery (or really, final 10 feet) returns are among the areas of eCommerce that remains friction-ful. I am incredibly bullish on Amazon’s future capabilities here (accelerated by a launch of a proprietary 3P delivery service) but beyond the suboptimal user experience, there is a huge pain point with what happens physically to goods once they are returned. Many are trying to solve this.

Logistics (Tech) Fundraising

The (fundraising) hits keep on coming. 3PL’s and Logistics Tech co’s continue raising tens of millions - hundreds of millions - of venture capital dollars. This list is far from exhaustive but a few that hit my radar.

US eCommerce is Huuuuuge

US eCommerce is on a tear, and Amazon and Shopify are both getting much larger. Nothing overly newsworthy here, but when you look at the numbers and visuals it’s extraordinary.

UPS + FedEx are A-Changin'

UPS and FedEx News: Great interview with UPS’s 1-year young CEO Carol Tomé. Sheds light on UPS’s new philosophies, pricing strategy and competitive positioning. Unrelated to that is a piece on some changes to FedEx’s SMB/eCommerce heavy service called Smartpost. It is being rebranded as FedEx Ground Economy. Nothing like creating more confusion in an industry already replete with a lack of transparency.

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© 2021 Second Marathon Consulting, LLC
Matthew Hertz is the founder of Second Marathon.

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