Problem: Shipping a package sucks (at least in the US): you have to guess the correct number of stamps, purchase the right “flat-rate box”, or physically go into a package shop. How could this be improved?
Solution: This business would use technology to optimize shipping at what I call the “0-point” — the point at which a package first leaves a consumer’s hands to be shipped.
Patrick McKenzie, who works for Stripe and currently lives in Japan, has been a phenomenal source of what inspires him about Japanese lifestyles and incremental improvements. One of them, which was posted about a week ago, discussed Japanese Package Logistics. Let’s read his story for some inspiration:
“I had another package to mail and couldn’t wait even two hours for Kuroneko to come to my door, so I thought ‘I will take it to the convenience store.’ But this got much better in last few years! Previously if you went to convenience store you had to fill out a paper shipping label then wait while the employee measured and weighed your package then charged you for it. But now we have computers! So I signed into my Kuroneko account on my phone and it was about twelve taps start to finishing… Measurement/etc will be done by the driver and then I get billed by Apple Pay, which I set up before getting the bar code. I feel like I am living in the future.”
Removing barriers to shipping in the consumer packaging business, I believe, will open up avenues for industries and be a huge profit-maker: especially as this model is optimized and translated to countries with low shipping reliability.
There are quite a few companies in the future of shipping industry, but most are focused on the actual transfer of packages from one location to another: this business would be focused on the interaction of individuals with their own package before and at the point of shipping. Unfortunately, this point of shipping has not been innovated on since the 1970s when FedEx invented the tracking number, “that string of digits that tell you where your package is and when it's going to be delivered,” as described by Neat-o-Rama. As the described, here’s the full FedEx story:
The system, launched in the late 1970s, was created to improve efficiencies. It worked so well that, in 1979, the system was offered to customers as COSMOS (Customers, Operations and Services Master Online System). When the system went online it included early prototypes of handheld computers that scanned package barcodes with wands. FedEx was aware that of the importance of all this data. FedEx founder Fred Smith is famous for saying, “The information about the package is as important as the package itself.”
The identification of package data is an extremely important one: this business would attempt to collect and monetize package data in the same way that Twitter, Facebook, and Snapchat attempt to collect and monetize personal information through monetization.
Through creating a slick and easily-integrated consumer experience, this business would allow shipping companies to have a much clearer understanding about the following data (which the Reevel Group describes as necessary for running an extremely light-weight, and efficient shipping operation):
Understand your shipping weights
Discover which zones you ship to and from
Examine how your company handles billing, including how quick and accurate your billing efforts are
Understand the technical specifications that are needed to manage, consolidate, and package shipments.
Ascertain if your company’s different departments in different locations are adhering to a common standard.
Ascertain the delivery lead time
Know how well shipping locations respond to varying shipping volumes.
Assess the effectiveness of your current shipment and notification technology as well as provide an avenue to assess alternatives.
Know if the internal support needed to integrate and or update new processes and technology are present and at your disposal.
Of course this is just the beginning, as reported by PR Newswire, “from 2016 to 2022, the global logistics market size is projected to grow at a CAGR of 3.48 percent to reach USD 12,256 Billion by 2022.” That’s 12 trillion dollars. Freightwave also, “estimates of the size of the global logistics industry range from $8 trillion to $12 trillion annually.” A business that even optimizes this by .1% would be a unicorn company. Maybe all those “import-export experts” are on to something…
Monetization: Fee from companies or business that use this shipping logistics product.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)