Yes, it’s an old play on words to say that instead of “thinking outside the box” we should be “thinking about the box,” but in today’s challenging shipping and logistics world of ecommerce, The Box is receiving some long overdue attention in terms of innovation. The parcel (aka “The Box”) is a key focus for the ecommerce, postal, logistics and delivery supply chains. And wonderful innovations are being seen around all aspects of The Box: shipping the box, delivering the box, and even creating The Box to begin with.
Shipping and the Box
In between purchase and delivery comes the actual shipping of products, and the box that contains the product(s) has become even more important. Recent implementation of dimensional weight pricing by major carriers UPS and FedEx have driven businesses to be more careful about how they ship their products, in an effort to keep shipping costs manageable and not use boxes larger than necessary, since that could result in significant price increases. Few shippers can afford to ship “air” these days, and competition between shippers is heating up rapidly, with new market entrees ranging from start-ups, to crowd-sourcing alternatives, to giants exploring new business lines.
The physical parcel has garnered more attention as shippers work to reduce their costs in transporting parcels and businesses work to avoid significant price increases resulting from the switch to dimensional weight pricing. All these changes have driven businesses to look harder at “the box” and seek cost-cutting alternatives.
Some solutions providers have focused on developing new product packaging systems that can create boxes to fit the volume of the contents on the fly, helping businesses move from having to use/store/purchase a variety of preformed box sizes for shipping purposes, to being able to custom-produce boxes that protect contents without being an excessive size.
Other solutions focus on reducing transportation/distribution costs by exploring more local warehousing and distribution alternatives, while other innovative solutions center on getting rid of the box altogether, such as services providing local delivery of purchases in a manner that does not require the same packaging as traditional shipping would, or in some cases does not require any packaging.
Delivery and the Box
The face of “last mile” delivery is changing as new delivery carriers enter the market, and innovations in delivery modes are being seen in response to growing consumer demands for more delivery options. Consumers are demanding more options and flexibility not only on the speed of delivery, choice of carrier, and cost of shipping, but also on the exact location and time for delivery of their purchases.
On the “where” of consumer parcel delivery, anywhere the consumer goes is fodder for innovative solutions, from their home, to work, to locations in between. Some innovators are looking at new ways to deliver parcels to the home, providing security and convenience and avoiding the dreaded “notice” left by carriers when the consumer is not home, while others are looking at innovations around other places the consumer routinely goes.
Innovation around parcel lockers continues to grow. For example, there are recent market entrees like CA-based SwapBox, which provides secure two-way use lockers for consumers to deposit goods to be shipped (and SwapBox does the packing), and also to receive parcels. Other entrepreneurs are focusing innovation on providing secure parcel delivery locations at the consumer’s home, such as Parcelhome’s Smart Box secure parcel delivery box which provides consumers with a secure parcel delivery locker at their residence, and still others are focusing on centralized secure parcel lockers such as the USPS’ GoPost solution. And innovators are really thinking beyond the parcel locker concept to any secure location at a consumer’s residence – including some that might surprise you!
A pilot program between Audi, DHL and Amazon gives DHL drivers the ability to access customer car trunks to securely deliver packages to the consumer’s home (where the car would be parked). In some ways, this concept is similar to those testing parcel delivery to secure parcel lockers, but by using the existing consumer car trunk as the secure parcel delivery location, cost of installing a new parcel locker is avoided. Entrepreneur CarDrops uses a similar concept of delivery to car trunks but is more carrier agnostic.
Innovations in the actual carrier also are being seen in the parcel delivery market, such as the “crowd-sourcing” approach to delivery of parcels being explored by a variety of innovators, including Amazon with its Uber-like local parcel delivery pilot (Amazon Flex); and new local delivery players such as Doorman which allows users to use a “Doorman” warehouse address for their purchases and then receive more delivery scheduling options than some carriers provide; or Silicon-Valley upstart Postmates, which may be known for delivering Starbucks, McDonalds, Apple and Walgreens purchases using its mobile app, but now is eyeing local retail delivery opportunities in the broader ecommerce market.
Consumer desires for delivery convenience and schedule flexibility are driving innovation around the “where” of delivery, but business’ needs to control costs are driving the “how” of delivery. On that front, we are moving from the sci-fi feel of the drone/UAV parcel delivery concept to pilot tests now being performed by posts and carriers. SwissPost, SingPost, Australia Post, and other posts actively have begun testing drone delivery of parcels and Amazon in April 2015 received FAA approval to start testing drone delivery of parcels in the U.S.
The innovations go beyond using drones for delivery, if that wasn’t far enough – there are different flavors of drone delivery envisioned, including recent testing by Workhorse Group of its Horsefly unmanned aerial system concept based on drones launched from its electric work trucks. Then there is Starship Technologies, which is designing a fleet of small ground delivery robots that it says “can complete local deliveries within 5-30 minutes from a local hub or retail outlet, for 10-15 times less than the cost of current last-mile delivery alternatives.”
The bottom line is that the “last mile” is certainly not last when it comes to new ideas and innovation around how The Box is delivered to the shopping public!
About the Box Itself
Sometimes it seems like the last holdout for innovation and improvement – the box itself. Beyond adjusting the box size and dimensions to better accommodate contents with the lowest weight and smallest dimension box possible, there are a few areas concerning the actual physical box used for shipping that are seeing recent innovation.
While businesses are focusing some attention on reducing the box size to better fit the contents, they also are being driven by consumer needs to offer better tracking solutions to identify where the box is along its journey, which leads to change on the physical box such as barcoding and labeling. The USPS and others are continually exploring new technology to better track parcels, such as sensors, GPS, RFID, all of which can lead to changes in design of physical parcels.
Even consumers are seeing innovation in boxes used for shipping. The Rapid Packaging Container, designed by two students at the Albert Nerken School of Engineering at Cooper Union, and demonstrated at a past PostalVision 2020 event, was probably one of the more innovative approaches to redesigning the plain vanilla cardboard box seen in a decade, at least for consumer use.
And we have not even touched on the design of The Box, with innovative elements being seen around branding, advertising and marketing… that’s an article all by itself!
Luckily for innovators in the postal ecosystem and parcel delivery space, there are some great opportunities for exposure and discussion, even for start-ups and entrepreneurs. At its March event, PostalVision 2020 showcased a long list of innovators, including many of those mentioned in this article. At the upcoming May 24-26, 2016 Post-Expo event to be held in Hong Kong, yet another opportunity to focus on innovators will occur with a special Live Innovation Showcase co-sponsored by PostalVision 2020 and the Postal Innovation Platform (PIP). The Post-Expo innovation showcase will include a series of interactive conference sessions where brand-new technology, ideas and concepts will be presented, including live demos of new innovations.
These venues and others are great breeding grounds for innovative ideas – for every challenge identified in the postal/parcel arena, innovation opportunities abound! It is imperative that those involved in the growth of this great ecosystem ensure there continue to be opportunities for innovation to grow!
Kathleen J. Siviter is president of Postal Consulting Services Inc. (PCSi) and has over 30 years’ experience in the postal industry, having worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), and a diverse set of clients with interest in the postal industry. She also serves as the Director, Community & Brand Development, for PostalVision 2020 (www.postalvision2020.com), an initiative designed to engage stakeholders in discussions about the future of the American postal system.