6/26

Very interesting report from the Wall Street Journal.  It looks at consumer expectations, costs, and economic sustainability of ecommerce delivery to non-dense areas. An excerpt:

While e-commerce is great for rural America, it is expensive for retailers and delivery companies. 

The longest mail route in the country—a 187.6-mile daily loop for carrier Jim Ed Bull—runs from Mangum. The longer the drive and the fewer the packages per stop—known as delivery density—the lower the profit for the U.S. Postal Service, UPS and FedEx. 

UPS says one mile a day across its U.S. delivery fleet costs up to $50 million a year. UPS’s Mr. Bledsoe drives 56 miles nearly every day to deliver medicine to one customer—a veterinarian—on his route. 

To offset the cost, UPS and FedEx charge an extra $4 per package for remote residential deliveries. The prevalence of free shipping to consumers and the need to price items the same online and in stores, typically leaves retailers bearing this additional cost. 

For retailers, that adds to already steep costs. Shipping a container of Tide Pods laundry detergent from Atlanta to urban Oklahoma City is estimated to cost a retailer $11.44—already more than the approximately $11 price of the item itself, according to an analysis by Spend Management Experts. Shipping the pods to Mangum costs $15.65.