Home Delivery: Local and Long Distance

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If your interests in simplicity and frugality have as much to do with protecting the environment and using less resources as they do with saving money, give some thought to reviving the old practice of home delivery.

Home delivery used to be universal (although just in cities). Period movies show shopping sprees in New York, London, and Paris where the shoppers merely sign for their purchases and move on to the next store, confident that their items will be delivered.

The decline of home delivery is due to two forces:

1. Households sending every adult member into the workforce, which brings in more cash, but means that many households have no one at home to receive deliveries.
2. Universal car ownership, which makes it possible for household members to just go and get things (especially convenient when work obligations made it impractical to stay home to wait for deliveries).

Home delivery only works well when there's a certain density of households being delivered to. When most houses are empty throughout the working day, home delivery is no longer practical.

The decline of home delivery opened the way for national shipping companies to begin home delivery of packages, and that, in turn, has allowed home delivery to begin to reappear. See for example Linsey Knerl's description of using Amazon's "Subscribe and Save" service to achieve most of what you could do with local delivery. (And, as on-line shopping began to take hold as the main way many people shopped, many grocery stores began reinstituting some form of local delivery.) The fact that national shipping companies have taken over from local delivery by individual stores means that not just urban folks can have things delivered—a big win as energy prices put the squeeze on rural folks.

From a resource point of view, home delivery wins on almost every measure.

Most obviously, home delivery saves fuel: It takes far less fuel for one delivery truck to drive to a hundred homes than it takes for a hundred people to each drive their own car to the store. It also scales well: If the store doubles its business, it can buy one more truck and hire one more driver (versus doubling the size of its parking lot so another hundred households can make another hundred trips to the store).

There are other advantages as well, although most are conditional:

• Having things delivered to your home saves both the time spent going to and from the store and the time spent pulling things off shelves—but only if you're able to effectively use the time you're home expecting a delivery.
• If you're the sort of person who's tempted by impulse buys, placing your order by phone or internet can reduce your exposure to the shelves of sodas, candy, snacks, and the like.

Information technology has the opportunity to completely restructure shipping, to make it much cheaper and save vast amounts of energy.

The old model, before FedEx, was for stuff to be stored locally in warehouses, which were supplied by rail, and from which stuff was shipped out in trucks. It was usually shipped to stores, which then did local delivery to urban customers.  This was reasonably fuel-efficient, but required large amounts of capital—someone had to own all the stuff in the warehouses.

In the early 1970s, FedEx created the hub-and-spokes model, where everything was shipped to a central hub, where it was sorted and then put back on planes to be sent back out to the FedEx office closest to its destination. Since one warehouse near the hub can deliver overnight anywhere in the world, it saves on capital costs, but it only works as long as fuel is cheap. When fuel is expensive, it does poorly—and the whole model fails for rail or barge shipping.

But maybe information technology can fill the gap.  A computer system, programmed with all the available shipping modes, could route packages on any transport that had space, preferring the cheapest and fastest ones. Since it costs almost nothing more to run a full ship (or barge, train, or truck) than one that's half-empty, transport companies could bid to carry packages part-way on a trip, and a package that's not urgent could make its leisurely way (on any number of different vehicles) until it was within local delivery distance.

If information technology can make sure that every vehicle carrying goods is full, we'll save a lot of fuel and a lot of money. And, as a side benefit, recreate the system of home delivery, thereby saving some more fuel.