Based on sixteen years of research in the US postal and parcel delivery industry, I have summarized three key principles that apply to the logistics industry, as follows:
First Law: The volume of goods from point A to point B and from point B to point A will never be balanced, and the shipping rates will also be different.
For example, the long-haul truckload from Los Angeles to Dallas is always greater than from Dallas to Los Angeles, and the freight rate for shipments from Dallas to Los Angeles is cheaper, while the rate from Los Angeles to Dallas is more expensive. In international logistics, for instance, the air freight volume from Shanghai, China to Los Angeles is much higher than the volume from Los Angeles to Shanghai. In some markets, the air freight rate can differ by up to 10 times. This principle also applies to parcel delivery: the volume of goods from point A to point B will always differ from the volume from point B to point A, and the costs will not be the same.
Second Law: No logistics system can be suitable for all types of freight products.
Simply put, companies that specialize in sorting, networking, and delivering small packages cannot be suitable for sorting, networking, and delivering large packages. In abstract terms, letters are essentially small parcels. The U.S. Postal Service's network, sorting, and delivery systems are designed for letters—such as high-speed letter sorting machines in postal processing centers, letter boxes, containers, and final delivery carts. On the other hand, UPS and FedEx are designed to handle medium and large packages, including their pickup trucks, sorting systems, and delivery vehicles. If you were to have the Postal Service handle medium and large packages, the costs would be much higher than UPS or FedEx, while UPS or FedEx would not be suitable for small parcels due to their network system. In summary, no logistics network, sorting logic, or delivery logic can be suitable for all types of parcels.
Third Law: The core competitiveness of a logistics company, under the premise of reliability and control, lies in three factors: price, speed, and coverage area, but all three cannot be satisfied simultaneously.
For example, let’s consider domestic parcels in the U.S. To achieve a competitive price and speed, one must sacrifice coverage. A parcel from Los Angeles to San Diego, about 200 km, can be delivered the next day via ground logistics, which satisfies both speed and price. However, this is not possible for a parcel from Los Angeles to New York, as coverage cannot be guaranteed. Similarly, if you want a competitive price and coverage, speed cannot be met. For example, to guarantee next-day delivery from Los Angeles to New York, air logistics is required, but if we sacrifice speed, we can use trucks or even trains (provided there is a large volume of goods). This ensures price and coverage, but sacrifices speed. Finally, if we sacrifice price to ensure speed and coverage, air logistics will be required for next-day delivery from Los Angeles to New York, meeting speed and coverage requirements, but price will no longer be competitive.
The core of the Third Law is essentially the time and price cost of the primary trunk network.
These three laws are more like three inequalities that I have summarized over the past decade. I hope to discuss them with everyone.
Lucas Zheng is the founder of SameZip and senior consultant of Piggyexpress, and loves the US Postal Service and logistics industry. He has spent 16 years researching and studying the US Postal Service, US logistics, and US package delivery. He is familiar with all e-commerce delivery channels in the United States, China to the United States, the United States to China, and domestic China.
