Tom,
The common theme that I read in all these interviews is that
yes, we want volume - but not any kind of volume. That's good news.
There is an enormous cost to deliver a package cross country to a
home. Reasons ? few houses are on main streets; they seldom
get more than one package a day; driving takes longer; By comparison,
delivering to businesses is almost a joy - if you are punctual.
So, package delivery by itself is the reason not. But e-commerce has
many facets. Next to brick-and-mortar retailers, manufacturers will
be the next to feel the pinch of commoditization. What's one to do?
Well, one could sell direct (bad). Or one can tie up with a delivery
system and then sell direct (good).
So, a manufacturer's www site accepts orders (paying some fees to a
portal for aggregation, perhaps), figures out distribution at a
macro level (or let someone else figure it out). Then ship to a
"customized warehouse" which does the end-consumer packaging and
delivery. The ordering is integrated with delivery (external, EDI).
And who will run these customized warehouses ? FDX, of course.
So, would FDX lose out to local businesses ? I think not - precisely
because they are local and they number over 20 in the US alone.
FDX might buy some out.
Who competes in this framework ?
- USPS -- did it ever give a hoot? Remember it has a First Class cow.
- UPS -- yes, and it is bigger. BUT, FDX is still there and ranked#1
- ABF -- is too narrow and not nationwide
- DHL -- not in the USA
So, there. My pitch for owning FDX.
Regards
Dinesh |
