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Sent Items #104: Sunday, October 11, 2020

Hi All!

This issue’s milestone countdown:

75 days to Christmas

46 to Thanksgiving

23 days to the Election

If you’re a Seinfeld fan, miss “NEWMAN”, and love the Postal Service, watch this video

Speaking of the Postal Service, they just announced their holiday deadlines for the 2020 Christmas season. As you can imagine, they have added buffer compared to equivalent TNTs (time in transit) from 2019. Unsurprising, given the changes earlier this summer + tailwind of ecomm growth, but pretty significant to see a +2 day buffer added to their core mailing products: First Class and Priority.

Something that hasn’t been discussed much but I believe to be a non-insignificant additional (marginal) tailwind is the fact that fewer families are getting together this Holiday season due to COVID, and will therefore ship their Christmas gifts, rather than loading up their cars or checking an extra suitcase.  

As I’ve said before, we are encouraging our friends and clients at Second Marathon to “assume Christmas is 2 weeks early this year, and market, target, sell earlier”. I believe all carriers will have (intermittent) failures this holiday season. Don’t leave your brand and its customer experience to the mercy of your logistics partners.


- Matt


Apple Starts Shipping Devices From Stores to Speed Up Deliveries - Bloomberg

  • While much of retail is increasingly moving to a “ship from store” model, Apple has relied on their DCs to service consumers.

  • Now items that are in stock can be shipped directly to consumers from a network of almost 300 retail stores spread across the U.S. and Canada.

  • Apple told staff the shift will mean faster delivery times for customers who live further from distribution centers than from stores. The products will be shipped through UPS in Canada and FedEx. in the U.S. via Ground shipping and may be delivered as early as the day after a customer’s order. The program will apply to customers who live within 100 miles from a store.

  • Apple started testing the program with a small number of stores after locations started re-opening from COVID related closures in June and July. It has rolled out to more, but not all retail sites.

  • Customers won’t be able to choose to have their orders shipped from a store nor will they be aware when it happens. The decision on where to ship an item from is decided by Apple’s operations team.

U.S. Postal Service Announces New Prices for 2021 - USPS

  • Like death and taxes, we can expect annual carrier rate increases (or nowadays, what seems to be semi-annual) 

  • The United States Postal Service filed notice with the Postal Regulatory Commission (PRC) last week of price changes to take effect Jan. 24, 2021.

  • The proposed prices would raise Mailing Services product prices approximately 1.8% for First-Class Mail and 1.5% for other categories. Although Mailing Services price increases are based on the consumer price index, competitive International Shipping Services prices are primarily adjusted according to market conditions.

  • The new prices will include no increase in the price of a First-Class Mail Forever stamp, which would remain at 55 cents. 

  • However, and most strikingly, I don’t see any rate increases for Commercial Priority Mail and First Class Packages, which will be a welcomed relief for Small Business shippers. That said, I would not be surprised if there is a follow-on announcement later this year or early next once the dust settles with the election + ecomm volume spike.

Staples To Pilot A Drop-Off Program For Easier E-Commerce Returns - Forbes

  • Staples is planning to use its stores as drop-off locations for returns of goods sold by other online brands. Staples is partnering with Optoro, a returns and reverse logistics company, to allow consumers to bring returns to the more than 1,000 Staples stores in this country, and get credit for returned items through a QR code on their phones.

  • Optoro and Staples plan to have the program, called Express Returns, in place in January, in time for the peak holiday returns period. Optoro also hopes to expand Express Returns to additional retail chains in the future.

How Amazon hid its safety crisis - Reveal

  • I write a lot about the domination of Amazon, and my personal affinity for the business, so here’s some balance. 

  • A new cache of company records obtained by Reveal from The Center for Investigative Reporting – including internal safety reports and weekly injury numbers from its nationwide network of fulfillment centers – shows that company officials have profoundly misled the public and lawmakers about its record on worker safety. They reveal a mounting injury crisis at Amazon warehouses, one that is especially acute at robotic facilities and during Prime week and the holiday peak – and one that Amazon has gone to great lengths to conceal. With weekly data from 2016 through 2019 from more than 150 Amazon warehouses, the records definitively expose the brutal cost to workers of Amazon’s vast shipping empire – and the bald misrepresentations the company has deployed to hide its growing safety crisis.

  • Amazon often points to the tens of millions of dollars it has invested to enhance safety practices. Yet Amazon’s injury rates have gone up each of the past four years, the internal data shows. In 2019, Amazon fulfillment centers recorded 14,000 serious injuries – those requiring days off or job restrictions. The overall rate of 7.7 serious injuries per 100 employees was 33% higher than in 2016 and nearly double the most recent industry standard.

This company built one of the world’s most efficient warehouses by embracing chaos - Quartz

  • For the operations dorks out there, here’s a lighter article on Amazon, one that details how it has excelled in efficiency and optimization through embracing chaos in fulfillment.

  • The core of its disruptive efficiency of Prime, though, is not Amazon’s automated shelf-moving warehouse robots, which is the innovation that gets the most attention. And it isn’t, on its surface, something that you would associate with a well-oiled machine. It’s not even a breakthrough technology. In fact, some version of it was already in place in Amazon’s early warehouses. What makes Amazon’s warehouses work is the way they organize inventory: with complete randomness.

  • At a traditionally organized warehouse, when a shipment of, say, toothpaste arrives, an employee looks up where the toothpaste shelf is located, and then moves the box to that shelf. When a box of toothpaste arrives at an Amazon warehouse, though, the process works differently. An employee removes each individual tube and stows it wherever he finds open space. Placement is completely random. Items aren’t organized by where they’re being shipped; they aren’t—aside from very big items—organized by size; and they aren’t organized by the type of customer who is likely to order them. A shipment of 50 tubes of toothpaste may ultimately be distributed to and stored in 50 different places.

  • This random system has been in place since early on in Amazon’s 24-year history, and to a casual observer, the result appears chaotic. The reason it makes sense to group these random products together has everything to do with technology: the speed and frequency with which customers order online, and the tools that Amazon has developed to keep track of every item in its vast warehouses.

  • First, random storage makes finding the toothpaste faster in an era of on-demand efficiency. If there were a dedicated “toothpaste shelf” and someone ordered toothpaste, a “picker”—how Amazon refers to employees who gather items—would need to travel there, whether he were 10 feet or 100 yards away from that location. But if the warehouse stores toothpaste in 50 different locations, there’s a much better chance that there’s a tube close to some picker. There’s also a greater chance that the second item the customer ordered is also nearby.

  • Randomness is also preferable when it comes to managing the wide range of items customers now order online—most practically by saving space. Amazon warehouses carry a huge variety of items that can be ordered at any moment, but they do not carry a huge number of each item.

Delivery startup goPuff raises $380M at a $3.9B valuation - GoPuff

  • GoPuff, which I wrote about a few weeks back, GoPuff is a Philadelphia-headquartered startup that delivers products like Tylenol, baby food and alcohol (basically, the stuff you’d buy at a convenience store) in 30 minutes or less.  And as an ops guy, I am always very impressed with the service (try it out here).

  • The company’s goal is to create “the go-to platform for over-the-counter medicine or household products or baby food or ice cream or even alcohol — goPuff will deliver all these products in under 30 minutes, 24/7.” 

  • While the company has kept a relatively low profile, it’s already available in more than 500 U.S. cities (recent launches include Dallas, Miami, Detroit, Minneapolis and Houston). And it has raised $1.35 billion in total funding, including a just-announced $380 million round that values the company at $3.9 billion.

  • Unlike a food delivery business like UberEats or DoorDash, GoPuff is more vertically integrated, in the sense that they purchase products directly from manufacturers, then gets those products to consumers through a network of 200 “micro-fulfillment” centers (staffed with goPuff employees) and a network of independent drivers.

Uber Sells Stake in Freight Unit to Private Investors - WSJ

  • A $500 million funding round from a group led by Greenbriar Equity brings in cash as Uber’s core ride-hailing business falters.The investment values the business at $3.3 billion after the funding round.

  • Uber is selling a stake in its Uber Freight truck brokerage arm for $500 million to investors in a funding round led by Greenbriar Equity Group LP, pumping fresh cash into a business that has been growing rapidly while also losing money at a fast clip.

  • The planned investment comes as the coronavirus pandemic has hammered Uber’s core ride-hailing business, prompting the company to slash jobs and re-evaluate cash-burning businesses such as Freight, which accounts for a small portion of Uber’s overall revenue.

  • Uber Freight generated $211 million in revenue in the second quarter, up 27% from the previous year and accounting for about 9.4% of Uber’s total revenue for the quarter. The logistics arm reported an adjusted net loss of $49 million compared with a $52 million loss in the same period in 2019.

The Inside Story of MacKenzie Scott, the Mysterious 60-Billion-Dollar Woman - Marker

  • Amazon’s first employee, Jeff Bezos’s ex-wife, and one of the world’s richest women is rewriting the philanthropy playbook.

  • While Jeff Bezos was building Amazon from a garage into one of the most powerful companies on earth and becoming the richest businessmen of this age, the world knew very little about his wife, MacKenzie, a novelist and a mother of four who helped start Amazon from that garage. Even after their divorce last year, accompanied by a public affair and scandal, thrust MacKenzie Scott (the name she took after the split) into the spotlight, she remained a private and elusive figure. Now, Scott, one of the richest women in the world, a billionaire tens times over, announced in July that she was giving away $1.7 billion to a wide swath of nonprofits, from historically Black colleges to a crisis text line. The gift was stunning in scale and in approach: Scott was making a mark as a new kind of philanthropist.

  • With a gift of that size, Scott could’ve built a cancer center, had a museum wing named after her, made a college rededicate itself in her name. Or, like virtually every other person who’s made significant amounts of money from tech, she could’ve created an organization to dole out grants based on her notions about how best to fix social issues. She chose another route.

  • Scott gave 116 grants, all at once, with very few strings attached, to mostly small organizations. They didn’t have to hit metrics she named; they didn’t have to create programs she favored. She even refused thank you notes when nonprofits asked how they could show their gratitude. And she specifically chose organizations led by people with “lived experience,” as Scott put it: women leading women’s groups, people of color leading racial equity groups.

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© 2020 Second Marathon Consulting, LLC
Matthew Hertz is the founder of Second Marathon.

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