I've written recently on why outsourcing the last mile results in lousy customer experience. Delivery services really need to be pivoted towards letting drivers own the last mile, in order to improve customer service.
(1) Comment on Article (linked):
.Legend:
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Customer (C)
Seller (S)
Amazon (AMZN)
Third-party logistics company (3PLC)
Driver (D)
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The CX under discussion is timely delivery. The value chain for this currently looks like:
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[Cs pay >a> Ss pay >b> AMZN pays >c> 3PLCs pay >d> Ds]
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>c> is where AMZN hands off highly variable costs to 3PLCs for a less variable fee
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>d> is where 3PLC hands off highly variable cost to Ds for a less variable fee
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AMZN used to have to deal with >d> directly, but didn't want to do the dirty work, so it handed the gun to 3PLCs, and they've dutifully performed. The rudimentary argument for encouraging this pattern is to say that AMZN has made the market more efficient by accruing value to C via reduced prices. In light of that, the article raises the contrary concern that this value accrued to C has costs to Ds.
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Forecasting the effects of that, systematically the market will turn around to Cs and say "your cheap prices are resulting in road accidents, please pay more for a better world." In other words, AMZN has conned the system into allowing inefficiently low C prices, by hiding the true cost of low C prices. (AMZN may or may not have done this intentionally - which is a completely separate concern from whether AMZN should bear legal liability for it - which is again a separate concern from whether AMZN will be fined by regulators or the courts for allowing this to happen.)
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(2) What I wrote on previously:
.Delivery brokers like BERUEats do the exact same thing, in certain markets.
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[Cs pay >a> Ss pay >b> BERU pays >d> Ds]
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This isn't efficient. The value chain should be:
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[Cs pay >e> Ds pay >a> Ss] and
[Ds pay >f> BERU only for SaaS]
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This essentially repositions Ds as dropshippers enabled by BERU as a software platform - where the Ds are able to own the customer, own their own independent businesses, charge whatever they want, and add truer value to the market by reducing BERU's unnecessarily high margins.
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