The “last mile” of ecommerce delivery typically produces the most emissions per package. Here are five ways merchants can help.
The post Tips for Sustainable Last-mile Deliveries appeared first on Practical Ecommerce.
The rise of ecommerce and the corresponding growth of delivery vehicles results in much more carbon emissions. Here are five tips for implementing sustainable practices.
The post 5 Steps to Sustainable Shipping appeared first on Practical Ecommerce.
Ecommerce packaging and logistics cause serious environmental harm. But the industry is improving, with many tools, services, and programs to help merchants. Here’s an overview.
The post Reducing the Environmental Impact of Ecommerce appeared first on Practical Ecommerce.
In 2022, sustainable selling is not just good for the environment. It also drives sales. Here are five steps to go green.
The post 5 Ways to Upgrade to Eco-friendly Ecommerce appeared first on Practical Ecommerce.
The U.S. Postal Service has announced a temporary increase in holiday shipping rates. Such increases from all carriers are inevitable. Merchants should adopt a shipping strategy to manage costs over the long term.
The post 3 Ways to Offset Shipping Rate Increases appeared first on Practical Ecommerce.
Online consumers expect free shipping. But small and mid-size merchants sometimes struggle with the cost. Here are innovative approaches to meet shopper expectations without losing money.
The post How to Offer Free Shipping without Going Broke appeared first on Practical Ecommerce.
Merchants in North America have many carrier choices for delivering goods to customers. The U.S. Postal Service’s flat-rate shipping boxes can save money in certain instances. We compare prices in this post.
The post 7 Reasons to Consider USPS Flat Rate Shipping appeared first on Practical Ecommerce.
Grandiose promises of drone deliveries have been around for years, but the recent surge of commercial and civil drone activity may spark a wider adoption.
I first addressed the state of commercial drone delivery last year.
According to a recent report by McKinsey & Co., there have been over 660,000 drone deliveries to global consumers in the last three years. As of early 2022, more than 2,000 drone deliveries occur each day worldwide. McKinsey projects global deliveries for 2022 will be close to 1.5 million, up from under half a million in 2021.
Here is a list of recent updates from companies advancing drone deliveries.
FedEx Express and Elroy Air
FedEx Express, a subsidiary of FedEx Corp., is teaming up with California-based Elroy Air, which is building an autonomous vertical take-off and landing aerial cargo system. FedEx Express will test Elroy Air’s Chaparral drones within FedEx’s middle-mile logistics operations, moving shipments between sortation locations autonomously.
The Chaparral aircraft can pick up 300-500 pounds of cargo autonomously and deliver it up to 300 miles by air.
FedEx and Elroy Air have been working together since January 2020 and will continue their collaboration to pursue certifications and begin flight testing in 2023.
–
Wing
Alphabet subsidiary Wing launched its first commercial drone delivery service in a U.S. metro area on April 7 in the Dallas-Fort Worth Metroplex to several thousand suburban homes. The drones fly health and wellness products from Walgreens directly to customers’ homes, ice cream from Blue Bell Creameries, prescription pet medications from Easyvet, and first-aid kits from Texas Health.
In March 2022, Wing completed 200,000 all-time commercial deliveries across its global markets. In 2021, Wing completed just over 100,000 drone deliveries in Australia. Recently, it had its busiest week ever, with more than 1,000 global deliveries in a single day (one every 25 seconds).
–
Walmart and DroneUp
Walmart and DroneUp, a global drone technology and services provider, have announced commercial drone delivery operations at three stores in Northwest Arkansas, operating from 8:00 a.m. to 8:00 p.m., seven days per week, to deliver items to eligible Walmart customers by air in as little as 30 minutes.
“When we invested in DroneUp earlier this year, we envisioned a drone delivery operation across multiple stores,” said Tom Ward, senior vice president of last mile at Walmart U.S. “Opening our first hub within months of our initial concept showcases DroneUp’s ability to execute drone delivery operations safely and with speed.”
–
SkyDrop
Domino’s and SkyDrop recently signed a deal to launch the second stage of their commercial drone delivery partnership in New Zealand. The companies plan to conduct a trial of drone delivery services from a Domino’s store in New Zealand to customers’ homes, expected to commence this year. SkyDrop or its designee will operate the test. SkyDrop’s advanced drones can conduct speedier, cheaper, and greener deliveries versus traditional methods.
Domino’s and SkyDrop partnered in 2016 to launch the first stage of drone delivery in New Zealand, delivering pizza from Domino’s Whangaparaoa store in Auckland. SkyDrop has since advanced its technology, increasing the payload of its drones to 3.5 kg (7.7 lbs) and delivery altitude up to 60 meters (197 ft). The company has incorporated a parachute system for safety and expanded production of its aircraft system in the U.S. in conjunction with the Federal Aviation Administration certification process. It also received certification from New Zealand’s Civil Aviation Authority.
–
Amazon Prime Air
Amazon has been testing Prime Air drone deliveries in a few rural areas of Oregon and California in the last two years. According to Business Insider, Amazon plans to expand the testing to 1,300 shoppers this year. Customers can choose from around 3,000 items weighing under 5 pounds. Amazon will offer drone services in 32 locations by 2025, delivering 1 million packages annually, free of charge to Prime customers. Ultimately, Amazon plans to operate 145 drone launchpads, flying 250 at one time and sending 500 million parcels a year by drone.
Amazon’s drone efforts have suffered setbacks, including recent crashes and missed deadlines. However, Prime Air has committed to join Amazon’s sub-same day delivery by 2024.
–
UPS Flight Forward
Last year, UPS Flight Forward began making Covid-19 vaccine deliveries via drone for Atrium Health Wake Forest Baptist medical center in Winston-Salem, North Carolina, using packaging from Cold Chain Technology developed for drones. UPS’s drone airline received first-of-its-kind approval from the FAA to carry alkaline and lithium batteries to power temperature monitoring devices required by the U.S. Centers for Disease Control and Prevention for Covid-19 vaccine transport. UPS Flight Forward worked with Cold Chain to design a custom, drone-sized case to maintain the temperature at 2 to 8 degrees Celsius.
In 2020, UPS teamed up with CVS Pharmacy to deliver prescription medicines by drone to retirement community residents in Florida. The service used Matternet’s M2 drones from three CVS locations.
–
Flytrex
Flytrex, an Israel-based drone-deliveries startup, completed a funding round for $40 million at the end of 2021, led by BRM Group, with participation from SoftBank-backed OurCrowd and Lukasz Gadowski, founder and chairman of Delivery Hero. To date, Flytex has raised a total of $60 million.
The company is working with Walmart, Chili’s, and other businesses in its North Carolina test area. “We estimate that we’ll have national approval by the first half of next year,” said Yariv Bash, Flytrex’s co-founder and CEO, in an interview. “We are in the process with the FAA, which we started more than a year ago.”
–
Meituan
Meituan, a large online shopping, entertainment, and delivery platform in China, has been running a pilot program delivering food to Shenzhen, a city of nearly 20 million. The program is available to just seven neighborhoods and a select number of merchants, and the drones deliver to designated streetside kiosks. Over the past two years, Meituan has flown 19,000 meals to 8,000 customers.
Manna runs a drone delivery program in Galway, Ireland, with authorization to take it across the European Union. Upon reaching a customer’s home, a drone will scan the area with lidar and radar to find a safe spot, descend, drop off the product, and fly off for its next pick-up. Manna runs 2,000 to 3,000 flights per day with fully autonomous drones at 50 miles per hour.
Abu Dhabi Department of Health announced that the Emirate of Abu Dhabi is adopting advanced drones to distribute and transfer medical supplies within the healthcare sector. The project collaborates between the DoH, the General Civil Aviation Authority, SkyGo (a drone provider), and Matternet, the logistics service. Drones deliver medicine, blood units, vaccines, and samples between laboratories, pharmacies, and healthcare facilities around the city.
Compostable, biodegradable mailers and boxes are among 2022’s top environmental fulfillment trends. Consumers and governments expect ecommerce businesses to help lower carbon emissions and move toward sustainability. Online sellers are responding. Many are changing their operations.
It is, however, important to understand packaging’s component materials since not everything recyclable or biodegradable is equally helpful.
Noissue is one of several packaging suppliers offering compostable ecommerce mailers. This example is made from two biodegradable materials: PLA and PBAT.
Four terms play a role in environmental packing material.
Next, it is helpful to understand where ecommerce packaging tends to end up.
Some observers believe it is better to keep packing materials out of landfills. But biodegradable materials, for example, are less recyclable than traditional plastics and decompose naturally in a landfill.
Polymer mailers and cardboard boxes are among the most common forms of ecommerce packaging.
Those materials are recyclable. Placing these plastics and cardboard in a proper recycling bin will likely result in new mailers, boxes, or similar.
However, a poly mailer or cardboard box degrades every time it is recycled — the fibers in cardboard become shorter. Thus a box cannot become quality paper, but cardboard from recycled paper is common and much more efficient than using virgin materials.
Recycling requires energy, chemicals, and water. Hence there’s a cost to the environment each time we recycle. Nonetheless, using recycled products is one way for ecommerce merchants to foster sustainability.
Some shoppers won’t recycle and will instead send discarded mailers and boxes to the landfill. While landfills are safe, some of these materials can take a few hundred years to break down.
Relatively new biodegradable plastics are often touted as a better alternative to recyclable polymers for ecommerce mailers or even product packaging.
Microbes naturally break down biodegradable plastics over time, converting the material into water, carbon dioxide, and biomass.
There are at least three categories of biodegradable plastics: biodegradable petroleum-based plastics, biopolymers (often called bioplastics), and hybrid plastics that combine the two.
Polybutylene adipate terephthalate (PBAT), made from petroleum, is a biodegradable plastic used in some ecommerce mailers. PBAT is different from bioplastic. For example, some bioplastics are derived from bacteria during the manufacturing process.
Other bioplastics such as polylactic acid (PLA) result from fermentation using plants like corn or sugar beets. PLA is a popular bioplastic because it does not contribute to greenhouse gas emissions and is compostable.
Again, biodegradable material breaks down naturally and does not harm the environment, while compostable material produces humus that may be beneficial. Thus, all compostables are biodegradable, but not all biodegradables are compostable.
PLA then is perhaps a better option than a biopolymer that is only biodegradable.
Ecommerce companies that choose biodegradable plastic mailers may also want to understand the components. A PLA-based mailer will probably help reduce carbon emissions in some small way, while other materials derived from petrochemicals might not.
In short, ecommerce uses enormous volumes of packing and shipping material. Shifting those materials to eco-friendly alternatives requires an understanding of the underlying contents.
In the last 15 years, the United States Postal Service has lost around $90 billion. It has often failed to meet delivery expectations. And yet, the USPS is vital for many ecommerce companies.
By law, the USPS must deliver to every address in the United States six days per week. This makes the USPS a common and often good choice for last-mile delivery specifically and ecommerce generally.
Thus many ecommerce operations use USPS services.
In fact, in 2020 the USPS delivered 7.3 billion packages in the United States. By comparison, United Parcel Service (UPS) delivered 6.3 billion packages and documents worldwide — to 120 nations — in 2020, according to the company’s reports.
Given its six-day delivery schedule, the USPS delivers roughly 3.2 million more daily packages than UPS. Hence the USPS is important for package delivery.
Don’t forget those losses. The USPS has experienced billion-dollar losses for 15 years in a row. Fiscal 2021, which ended September 30, saw a $4.9 billion net loss.
In an odd way, that $4.9 billion loss is good considering that USPS had a $9.2 billion net loss in fiscal 2020.
Some opponents have argued that these losses indicate that the USPS should either be shuttered or privatized.
A private USPS would likely shift to profitability rather quickly. This could happen by shedding some of its most onerous problems. Let’s consider a few of those.
Prepaid health benefits. For 10 of the years that the USPS experienced billion-dollar losses, it was prepaying approximately $5 billion annually in retiree health benefits because of a legislative requirement. Before that, the agency had earned a modest profit of roughly $9 billion from fiscal 2003 to 2006. Private companies would not likely produce losses to pre-fund health care.
Employee pay. The median annual wage for postal workers was $51,080 in May 2020, according to the U.S. Bureau of Labor Statistics. The median annual wage for UPS workers in 2020 was $44,254, according to the company’s 2020 annual report. If the USPS were private, it could lower its wages to match the industry and save billions.
Price caps. The USPS cannot raise rates without permission. The organization essentially needs an act of Congress to boost postage and package rates. Plus, it must adhere to unrealistic first-class-mail standards without the ability to raise prices in step with costs. A private USPS would almost certainly increase postage rates for first-class mail or eliminate the service altogether to focus on more profitable offerings.
Comprehensive delivery. The USPS delivers to every address in the United States. A private USPS would presumably not serve many rural addresses, requiring those folks to come to a central hub to pick up packages and mail.
Modernization. Lastly, the USPS has borrowing limits. It cannot seek out loans for investment in new equipment, nor can it seek outside equity.
So yes, a private USPS — or a shuttered USPS replaced by an army of private companies — could become profitable. But is that better?
In its 10-year “Delivering for America” plan, unveiled earlier this year, the USPS proposed changes that, if successful, would lead to small annual profits.
In early 2021, the USPS released a 10-year plan to overhaul the organization and make it self-sustaining.
The plan addresses all of the problems described above, plus other issues around employee retention, logistics, and infrastructure.
For example, the plan changes service standards for some mail classes so the USPS can move those items with trucks (which the USPS owns) rather than via contracted air services.
The plan also includes processing improvements that could boost package handling capacity by 4.5 million boxes daily by the end of 2022. Moving billions of additional packages would take some pressure off of shipping during peak holiday periods.
Capacity would continue to grow over the next decade.
A financially viable and increasingly capable USPS might be very good for ecommerce businesses, especially small and mid-sized companies not able to build last-mile fleets.
There is, however, no guarantee that Congress will accept the plan. Both the U.S. House and Senate had postal reform bills in committee at the time of writing. But there were certainly disagreements.
Some legislators did not want a change in mail standards. And President Biden’s November 19 nominees to the USPS Board of Governors have led some to think that Postmaster General Louis DeJoy could soon be out of a job.
Ecommerce owners and managers may want to take a side. The USPS’s future is being debated. This mainstay of ecommerce delivery could soon be on its way to improved capabilities or not.
It seems too important for ecommerce businesses, particularly SMBs, to sit and watch.