Online retail businesses will drive the shipping industry to get parcels to customers faster than anyone ever thought possible. They’re making more money than ever, and getting to where they’ve gotten today has been no small feat. Ten years ago, skeptics of online business would’ve been reasonable in saying that it just wouldn’t be able to compete with brick-and-mortar stores, which has most of the products that consumers need just minutes away from the comfort of their own homes. Add to that the anxiety that consumers used to feel when making online payments, and it would’ve been clear that online retail businesses had their work cut out for them. Today, however, the online retail business is booming, with sales last holiday season up more than 10 percent, despite many customers being able to purchase items from stores. Advancements in shipping may well have contributed to this. ?
Nowadays, customers are finding that they get their orders ahead of schedule. They quite frequently get their hands on orders that are supposed to take three days to ship in less than 48 hours. Still, shipping times and fees are two of the biggest obstacles standing in the way of the containing expansion of the online retail business. Customers don’t want to wait days for their products to arrive or pay anything for the privilege to wait, let alone the rather high shipping fees that companies charge for two-day and overnight shipping. As a result, companies aren’t getting all the orders (or money) they could be getting.
All this creates a huge economic incentive to make shipping faster and cheaper. Online businesses are making huge efforts to eliminate the main competitive advantages of brick-and-mortar stores: the lack of shipping times and their associated fees. Online retail companies will be doing all they can to eliminate these, including developing their own in-house shipping solutions. Shipping companies have surely taken note of this threat, as online retail companies are significant customers and therefore sources of revenue. Because shipping and logistics companies don’t want to lose this revenue, they’ll try their best to remain one step ahead of these companies’ own shipping ideas. Expect continuing gains in shipping speeds from this competition that will develop.
To be sure, today’s shipping companies use innovative techniques to get parcels to their customers fast. But much of the time, parcels have to be transported by plane to a shipping hub for ground transport to other shipping hubs before they can finally be placed onto delivery trucks. Technological breakthroughs, however, have led companies to experiment with drones for short-distance delivery of products by air. There are several advantages to this. The first is that since the drones are small and deliver only one package at a time, there’s no need to wait for a delivery truck to deliver parcels to other recipients before having your shipment appear at your doorstep. The second is that there’s less potential for delays, and traffic congestion or road conditions certainly won’t be among their causes.
There’s also great potential if technological advances cut costs for the development and implementation of delivery drones. Theoretically, the fastest possible way to deliver a parcel is to send it by air from its origin straight to its delivery point. Although that’s not commercially possible yet with current costs and technology, inexpensive delivery by air within 24 hours is not just what you want, it’s what the online retail and shipping companies want too. They could be making more money this way, after all. And if there’s money to be made, you can bet that companies will do anything they can to pursue it.
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