Monday, June 21, 2010

Why the First Mile Matters

Many postal commentators have suggested that the Postal Service take a last mile strategy, focusing on the advantages that the delivery network offers shippers and advertisers for a low cost solution.   What these commentators miss is that a last mile strategy results in an enterprise that has little control over what it handles and little understanding as to what the mailer or shipper really needs for service.

FedEx and UPS and for that matter Pitney Bowes, Valassis, and Val-Pak all have first-mile strategies, working closely with customers to ensure that their shipping or mailing needs are met from the point of production until delivery.  All of these customers invest heavily in the sales and customer support efforts required to offer service in the first mile.   By controlling the first mile, these companies control the entire process including in the case of FedEx, UPS and Valassis who actual delivers the item to the home or business. 

The importance of the first mile in a globalized manufacturing environment can be seen in the distribution of the new iPhones. as illustrated on the tracking screen shots posted on the apple insider website.     FedEx is handling the shipments direct from the manufacturer in China all the way through home or business delivery.  FedEx's focus on the first mile which included the full understanding of the critical shipping needs of customers like Apple drove its investment in infrastructure and information systems that produced a seamless delivery chain that included planeloads of iPhones from China connected to air and truck movements in the United States, and finally delivery routes that will deliver iPhones to hundreds of thousands of addresses in all 50 states on June 24.

Among the debates currently waging in Postal Policy are two that relate to the first mile.  The first relates to retail services which raises the question as to what kind of first mile strategy the Postal Service should have for its retail customers, those that buy services one at a time or in very small quantities.  There are multiple models for providing first mile retail services other than the corporate post office that the Postal Service now uses.  Whether the Postal Service will have the resources and legal authority to try those options is now on the table.

The second relates to its first mile strategy for commercial and small business customers and whether the Postal Service should be allowed to offer services integrating the process from concept to delivery.  The Postal Service has posted an request for information for developing an integrated product for small businesses and has some limited efforts in that regard using postcards.   However, these efforts are controversial and the policy debate will likely decide how far they proceed.

1 comment:

Anonymous said...

ADVO cares about the customers? A big pack of loose coupons that fall all over the place. Sure they care.