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Businesses The Internet United States

E-Commerce's Biggest Obstacle May Be Slow Postal Services (thestreet.com) 237

Long-time Slashdot reader rudy_wayne writes: J.C. Penney CEO Marvin Ellison recently said that e-commerce companies' biggest challenge is that they are all expanding their businesses and pushing for faster delivery, but UPS, Fedex and especially the United States Postal Service aren't able to keep up, at least not at same cost that exists today, because they're not increasing their delivery capacity at the same rate e-commerce is growing, He said this will cause a supply and demand issue "that's going to be apparent here pretty soon."
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E-Commerce's Biggest Obstacle May Be Slow Postal Services

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  • Capacity or Cost? (Score:3, Insightful)

    by Drethon ( 1445051 ) on Monday June 19, 2017 @06:40AM (#54646305)

    For a long time the US postal service has been losing money, they posted a 5.6 billion loss in 2016. I think they would be more than happy to grow their service but can they grow in a way that is profitable for the USPS that doesn't cost more than e-commerce is willing to pay?

    • by Nidi62 ( 1525137 ) on Monday June 19, 2017 @06:46AM (#54646329)

      For a long time the US postal service has been losing money, they posted a 5.6 billion loss in 2016. I think they would be more than happy to grow their service but can they grow in a way that is profitable for the USPS that doesn't cost more than e-commerce is willing to pay?

      Well, once they have their pension fully funded for the next 3 generations as legally mandated by Congress they will probably have enough money to expand capacity. Of course, growth=more workers=more pension, so they would probably have to fund that as well which would slow their growth.

      • Re:Capacity or Cost? (Score:5, Interesting)

        by MightyYar ( 622222 ) on Monday June 19, 2017 @07:02AM (#54646405)

        The 3-generation pension thing is a myth. They are simply required to fund the benefits that they promise existing workers given standard actuarial tables which estimate lifetime. I would like this rule extended to the entire government, as we are sitting on a liability time bomb. My beef with the treatment of the USPS is I don't think congress phased in the new rules slowly enough for the business to adjust - but no matter what it was going to be traumatic.

        • by Anonymous Coward on Monday June 19, 2017 @07:40AM (#54646543)

          I would like this rule extended to the entire government, as we are sitting on a liability time bomb

          I would like this rule extended to private corporations.

          • by Wycliffe ( 116160 ) on Monday June 19, 2017 @08:03AM (#54646683) Homepage

            I would like this rule extended to the entire government, as we are sitting on a liability time bomb

            I would like this rule extended to private corporations.

            I agree completely. Unfunded pensions are a ponzi scheme that should have never been allowed. Whether it is Social Security, police officers, a car manufacturer, etc... promising to pay retirement out of future revenue is a disaster waiting to happen. Places like Detroit show what happens when your population shrinks and you no longer have the tax base to support your future obligations. Same with private corporations. They can go out of business, downsize, etc... and if their profit or workforce shrinks, there is no way they can fund those future obligations. At the very least, future obligations need to be on the book as debt owed so that if they go bankrupt, the retirees have equal footing to other creditors. I live in Missouri, and our public school teachers have a fully funded pension. My grandma actually gets raises when they have too much money in their pension fund. If school teachers can do it then other government and private businesses should be able to do it too.

            • Re:Capacity or Cost? (Score:4, Interesting)

              by Hardhead_7 ( 987030 ) on Monday June 19, 2017 @08:36AM (#54646861)
              > Unfunded pensions are a ponzi scheme that should have never been allowed. I think there's a middle ground between fully funded and unfunded. Or maybe companies should be forced to buy "pension insurance." :) Or maybe it's just something we should have the government do (ie, Social Security).
              • by Wycliffe ( 116160 ) on Monday June 19, 2017 @09:12AM (#54647089) Homepage

                > Unfunded pensions are a ponzi scheme that should have never been allowed.
                I think there's a middle ground between fully funded and unfunded. Or maybe companies should be forced to buy "pension insurance." :)
                Or maybe it's just something we should have the government do (ie, Social Security).

                Social Security is no better. It's also unfunded. It pays out benefits using current revenue. I see no benefits of an unfunded pension. What are the benefits of an unfunded pensions? It's an unlisted IOU (aka liability) for whoever is promising it. It's a way to promise to pay someone more without actually paying them. A fulled funded pension also has the advantage that a person would have the option of taking the extra cash instead of the pension. The only advantage an unfunded pension has is the hope that future revenue is greater than current revenue. This is a horrible assumption that likely only holds true 50% of the time at best.

                • What's your alternative? Savings? Private pension funds? Those depend on the insurance and bank not suddenly going poof and taking all your money with it.

                  A government backed pension paid by current tax generation has one advantage. It may be much, it may be little, depending on the current economic situation and whether tax revenue can fund it. But it cannot be GONE as long as government exists.

                  And, well, if you consider government gone poof... ain't that worth losing your pension over?

                • by pnutjam ( 523990 )
                  Social Security was designed to avoid accumulating large pools of money. Because large pools of money cause problems. They are truly [npr.org] what caused the 2008 crisis.
                  Pools of pension dollars are irresistible [psc-cuny.org] in our managementist system, even capitalism would be an improvement over this mess.
              • by 140Mandak262Jamuna ( 970587 ) on Monday June 19, 2017 @09:24AM (#54647169) Journal
                Yes, there is a Pension Benefit Guarantee Corporation. Companies must buy the policy for defined benefit plans. It maxes out at some 45K a year. Some airline pilots pensions are in the range of 145K.

                The problem is, use the rosy projections on good years to show their pension obligations are "overfunded" and withdraw the cash, distribute it as bonus among the top executives. Then on the next year when the returns are lower, they feign ignorance, "omg, it is underfunded, so you pensioners are dragging the company down. we cant fund it. We will go bankrupt and you lose it all. So accept these lower terms". They have been raiding pension funds, built up over 40 years. From 1950 to 1990. They raided them all through the 90s. And converted all the defined benefit plans to defined contribution plans. Except government, there are very few defined benefit plans exist in usa today.

        • If this is a good rule then it should be expanded society wide since otherwise it would mean that workers could lose pensions with private companies also.

          There are enough private companies that offer benefits but don't fund them and declare bankruptcy if something bad happens. That should also be illegal.

          However, what this says is maybe benefits should not be part of your job at all so that companies don't have to deal with this stuff and we can deal with it at a societal level where that is cheaper and mor

          • That should also be illegal.

            Actually, the postal rules now closely mirror private rules. This is all about bringing government into line with what we demand from private companies.

            what this says is maybe benefits should not be part of your job at all

            Benefits are fine. What isn't fine is empty promises in lieu of compensation. It is an immoral practice to make someone work for a promise that you have no way to ensure is kept. It is an immoral practice to burden your children with debts just to fund your recurring expenses. There is nothing OK about unfunded benefits.

          • by Geoffrey.landis ( 926948 ) on Monday June 19, 2017 @09:56AM (#54647443) Homepage

            However, what this says is maybe benefits should not be part of your job at all so that companies don't have to deal with this stuff and we can deal with it at a societal level where that is cheaper and more effective.

            Hmm-- interesting idea. We could have a government-mandated plan that provides some sort of minimum benefits, which everybody pays into as part of their job, and that could be like a "safety net" applying to all employees, so they're not destitute even if their savings get drained and their company goes bankrupt. And then, companies could also offer benefits beyond this minimum, a "retirement plan," if you will, so people who worked for that company would have an income that's more than that safety-net minimum when they retire. A two-layer plan. The minimum plan would just be be security, be part of the overall social structure.

            Say, we could even call it that: "social security." Good name!

        • It's not a myth when NO ONE else is required to do this. Certainly not one corporation. So yeah, fuck off.
          • I don't think you understand how private pensions work or how highly they are regulated. And no wonder, with an attitude like that you'll be plenty ignorant.

        • The 3-generation pension thing is a myth. They are simply required to fund the benefits that they promise existing workers given standard actuarial tables which estimate lifetime. I would like this rule extended to the entire government, as we are sitting on a liability time bomb. My beef with the treatment of the USPS is I don't think congress phased in the new rules slowly enough for the business to adjust - but no matter what it was going to be traumatic.

          From the government's perspective, there is no time bomb.

          In the worst case scenario, pension/benefits funding is drained / costs grow way too high. The government just prints out a few trillion dollars to fund it.

          The problem is solved, from the government's perspective. Congress critters are already wealthy, and if they don't like the inflation they'll give themselves a pay raise / demand more from lobbyists. Everyone with a government pension / benefits gets their shit fulfilled. It doesn't matter if t

    • Re:Capacity or Cost? (Score:4, Interesting)

      by tlambert ( 566799 ) on Monday June 19, 2017 @08:32AM (#54646841)

      For a long time the US postal service has been losing money, they posted a 5.6 billion loss in 2016.

      There are three main reasons for them posting a loss:

      1. They are the only division of the federal government required to fully fund their pension plan, rather than switching to a "cash balance" plan.

      2. They are the only division of the federal government required to fully fund their medical plan, called "Mail Handler's Benefits Program". This is because they have to accept all federal employees who want to enroll in it (rather than private insurance offered in their own division). This is also the medical plan for all members of congress and their dependents.

      3. Their bulk mail delivery operates at a negotiated loss. Which wouldn't be a problem, had the Direct Marketing Association not turned around, and turned all the flyers that used to be sent separately into one "coupon brochure" by making an outside "wrapper" page that folds in half, and the other pieces go inside it. Including things like the Trader Joe's Catalog that comes once a month or so.

      So yes, they are posting a loss, because the DMA intermediated between them and the flyer senders to take all the profit, while leaving the post office to do the deliver ... on one piece.

      The fix is to raise their bulk rates -- which they are prohibited from doing.

    • by Hardhead_7 ( 987030 ) on Monday June 19, 2017 @08:34AM (#54646849)
      The main problem with the USPS is that Congress has them operating as a semi-business, semi-public service. That is to say, Congress has told them "act like a business, and turn a profit." But they won't let the Post Office do the most basic of business-like things: set prices.

      They can't raise stamp prices, they have draconian rules imposed on them about pension funding, etc. Now, I'm not against Congress artificially keeping stamp prices low - we can view that as a public service similar to roads (we don't expect the Highway Department to turn a profit). But we need to pick one or the other - either is a "government business" and needs to run like one or a public service where we expect a loss for public good. Asking for both gets us dysfunction. It's amazing the USPS is as good as it is, all things considered.
      • Re:Capacity or Cost? (Score:5, Interesting)

        by Eyezen ( 548114 ) on Monday June 19, 2017 @09:37AM (#54647281)

        It's amazing the USPS is as good as it is, all things considered.

        Absolutely, everyone like to pick on the USPS but if you were to say to someone who didn't know what the USPS was that one could stick a piece of paper in a envelope and legibly (or not) write an address on it and stick it in a nondescript looking box outside your home with only a little red flag to alert someone of your intentions and have it picked up and delivered anywhere in the U.S. usually within a couple of days and at the most a week to another nondescript box which may (or may not) have said legible address on it for all of $.50 they would call you crazy.

    • The problem is best described as neither cost nor capacity, but instead speed limits. As in 65 mph. Basically, we can't get things physically anywhere unless it is coming from less than 100 miles.

  • by DeplorableCodeMonkey ( 4828467 ) on Monday June 19, 2017 @06:54AM (#54646359)

    Make in-store pickup really, really fast. Many brick and mortar stores make it too slow. So that is one of the main reasons why they are losing out to Amazon. If it takes half a day or more from me hitting "buy" on the site and the local store putting together the order, that's too slow for what it is. Most of the time I go into brick and mortar stores in our area, they don't have that much volume. There's no excuse for them to be slow. As far as I'm concerned, they're slitting their throats while Amazon sits there like \_()_/ while chucking tens of billions in low-hanging fruit into their cart.

    • by Gilgaron ( 575091 ) on Monday June 19, 2017 @07:27AM (#54646485)
      We bought something at Sears the other day (shocking, I know) and they had redone their pickup area with a computer to scan the email barcode and a timer would start where the person had 5 minutes to bring the package out (she took 2). I was pretty impressed versus the first (and last) time I tried to do this at Best Buy where the item was not ready for pickup, despite the email stating it was, and they had to run around and ended up finding an open box item of similar type they discounted further in recompense. It would have been faster and as accurate to give my children a sketch of the item in crayon and send them wandering throughout the store. They'll probably go out of business anyway but the way Sears did it was the best I've seen so far.
      • My BestBuy has the items ready to go on a shelf right by the customer service / online pickup counter. I've pretty much only done it with games and Amiibo, but they do have a closed off area just behind it where larger items could be stored. I also recently did an in-store pickup at a Target for a larger item. They had a similar deal where you get there and confirm the shit you're picking up, then they send someone to the back to go fetch the thing. I didn't time it, but it did take longer than I expect

    • by hackertourist ( 2202674 ) on Monday June 19, 2017 @08:47AM (#54646913)

      The whole point of e-commerce is to not have to go to the bloody store!

    • Micro Center has done a great job at in-store pickup for years. Orders are usually ready by the time I get to the store, if I left home right after ordering. Plus you get to bypass the 10+minute checkout line by going through the less busy pickup desk.

      On the other hand, I was shocked at how terrible in-store pickup is at JoAnn Fabrics last week. First, with regular in-store purchases they don't price match their own website, which had everything I was planning to buy at 40% off the store price. Second, if I

  • by Gussington ( 4512999 ) on Monday June 19, 2017 @07:06AM (#54646423)
    Most ecommerce sites I use have next day delivery, some even do offer same day delivery if you order early in the morning. I can't think of many things I need faster than that. Is this really a problem?
  • Now that Amazon is contracting it's own delivery to shave costs, serviced has gone straight to shit.

    Random delivery notification, inability to follow some directions like "leave on covered porch not out in the rain by mailbox you fucktard." Items randomly disappearing.

    Delivery notifications are entirely useless. I'll get notified of a delivery then have the item show up 5 hours later. I assume it's so they can report to Amazon that it was delivered on time.

    • The Amazon drivers covering my area seem to do their jobs, even going so far as to deliver to my door if I am home and the leasing office if I am not. USPS, UPS, FedEx, and DHL all deliver only to the leasing office, which is really inconvenient for me when they deliver a large/heavy package and I have to drag it across the parking lot (they could have parked in front of my building) and carry it up to my 3rd floor walk-up.

      I know, my fault I chose to live in a 3rd floor walk-up. That's actually why I don'
  • As it was explained to me, Arne Nashbar made a great decision by expanding his bicycle mail order warehouse mere feet from a UPS facility. For as long as that was true he revolutionized buying bike parts. As it was explained to me, Amazon now has a live bidding system for shipping as your order is processed. Surepost seems to low bid/ win out a lot. That means UPS gets it as far as your local USPS PO, where it languishes because their schedules don't sync. Amazon waiting until a first-leg truck is full enough to roll doesn't help either.
  • Heh... (Score:4, Interesting)

    by XSportSeeker ( 4641865 ) on Monday June 19, 2017 @08:12AM (#54646735)

    Think you guys have it bad there in the US? Try postal service in Brazil. It's a state-owned monopoly that exploits people with extremely expensive pricing, and for products that are coming from outside the country (like chinese products bought on eBay and other sites), the review process to charge for importation taxes can take anywhere from a month to half an year - regularly. Yes, I'm not talking about extremes here, this is the average timeframe.
    You never know what you are going to get, there is no tracking system for that, there's no online communication system (like really, when there are taxes to be paid you get sent a notice via snail mail, there is no other option), you can end up getting charged over double the cost of the product plus shipping, you have to go get the product yourself from a designated post office that's oftenly not the closest to your home address, and taxes need to be paid in cash - no other forms of payment accepted.

    It's pure unbridled exploitation from a monopoly.

    Things like same day delivery or guaranteed next day delivery like what Amazon do is pretty much impossible given Brazil's infrastructure. And the taxation structure is probably the reason why Amazon in Brazil never went above selling eBooks, plus bureaucracy and other crap. And services like Blue Apron, Dollar Shave Club, among others are kinda impossible to work well here.

    I've seen packages of mine getting sent to the other side of the country or even to other countries due to postal service error.
    But of course, there's absolutely zero pressure for the service to ever get better since it works that way.

    • But Brazil is fractally corrupt. Everything you look at seems corrupt, until you take a closer look at it and find out that you were only scratching the surface of corruption.

      Apparently they have a lot of the same problems in lots of other countries as well, and there's tons of little businesses which expedite shipping as a result. Clearly, the USA is actually a great place to operate businesses which depend on ordering a lot of parts from other countries, because you tend to actually get things.

    • A correction in what the commentator above wrote. The entity responsible for customs delays and extra charges in Brazil is actually the Brazilian "Receita Federal" (something like the US Customs), where it in practice has no obligation to process the packages within an acceptable timeframe or even explain what happened when it withdrew the packages.
  • Which is what higher shipping prices would do. No conflict here: supply and demand handles this situation nicely. As long as petulant millennials can get over their feeling of entitlement to free shipping. :)
  • What is the Hurry??? (Score:5, Interesting)

    by ve3oat ( 884827 ) on Monday June 19, 2017 @08:23AM (#54646793) Homepage
    I don't know why it is, but many of the companies that I buy stuff from over the Internet assume automatically that I want it delivered "tomorrow" or within 3 days at the most. If I needed stuff that fast, I would go to the store and buy it there, or I would have bought it all a month ago in preparation for what I am doing today.

    So when I buy stuff over the Internet, it usually doesn't matter when it comes and I prefer that they ship it by Canada Post, or USPS, or the Royal Mail, whatever. I am not in a hurry and surface mail is just fine. We get very good mail delivery where I live and if a parcel is too big for my box then I go to the Post Office to pick it up, knowing that it is safe and secure.

    What really bugs me is having to deal with the so-called courier companies who invariably come while I am not at home and leave stuff on the porch or leave a notice on my doorknob. They say they will "attempt delivery" again tomorrow but, No, no one comes even though I have made a point of staying at home, alert to the driveway and door. Then I end up having to drive all the way into the city to pick up my parcel at the courier's office anyway. Give me the Post Office any day!

    Let those who need 72-hour delivery pay extra for it and leave me alone with much cheaper shipping charges and delivery within two or three weeks. I am fine with that.
    • What really bugs me is having to deal with the so-called courier companies who invariably come while I am not at home and leave stuff on the porch or leave a notice on my doorknob. They say they will "attempt delivery" again tomorrow but, No, no one comes even though I have made a point of staying at home, alert to the driveway and door. Then I end up having to drive all the way into the city to pick up my parcel at the courier's office anyway. Give me the Post Office any day!

      I have all of these problems too... with the post office. I'm going to go in this morning to pick up a parcel for which they claim they left a slip (they didn't) which would probably have fit into my mailbox just fine.

      It's not that I've never had these problems with the other carriers, it's that I have them a lot more with the USPS than I do with UPS or FedEx. I'm supposed to get email from USPS, UPS, and FedEx for delivery exceptions. USPS is the only one that reliably fails to send me such messages. And u

      • Meanwhile, I've had a carrier shove a parcel into my mailbox that was the exact dimensions of the inside of the mailbox... from the back (it was a bank of mailboxes) where there was no lip... so I could not remove it from the front (the only part I could open) where there was a lip.

        I ended up having to cut the parcel open to remove its contents and leave the empty package for the carrier to deal with.

        I'm glad he's not my carrier anymore, as that was one of the less idiotic things he did.
    • The trouble is more when your order takes literally months to be delivered
  • Comment removed (Score:4, Interesting)

    by account_deleted ( 4530225 ) on Monday June 19, 2017 @08:25AM (#54646805)
    Comment removed based on user account deletion
  • by DontBeAMoran ( 4843879 ) on Monday June 19, 2017 @08:31AM (#54646833)

    Something I'd like to know is how Chinese sellers on eBay are able to give "free shipping" on sub-$1 items. I've even won a lot of auctions below 25 cents and I've always received the items. Of course it takes weeks and sometimes nearly two months to arrive, but I get the items.

    My question is, who's paying USPS, Canada Post, etc? Is China trying to bankrupt our postal services?

    • My question is, who's paying USPS, Canada Post, etc? Is China trying to bankrupt our postal services?

      China post is clearly not making anything on these packages. The money has to be made up by the government. This amounts to a Chinese subsidy for people shipping a lot of crap to the USA. If they're trying to destroy anything, it's American retail.

  • Here in the UK, our biggest problem isn't the postal service. I've had experiences with both the USPS and the Royal Mail. By and large, the Royal Mail is not that bad. It has its problems, sure, but I've generally found it more reliable than the US equivalent. Our geography is generally just easier for that kind of thing, I suspect.

    The biggest problem we have over here in the e-commerce sphere is Amazon Bloody Logistics. This is the single worst delivery organisation I have ever encountered, by a long reach

    • That's remarkable. My experience here in the US is that when Amazon handles the delivery on their own (same or next day stuff) they are very reliable. Of course this being the US it is an entirely different organization than you have over there. For regular stuff I have had issues with the US mail marking tracked packages as delivered in the system on Tuesday and then not actually delivering the package until Wednesday or Thursday.
      • What's badged as Amazon Logistics seems to actually vary a lot from country to country, depending on local conditions and labour laws.

        Here in the UK, it is an absolutely bare-bones system with very few actual employees. It's mostly self-employed drivers hired on a contracted basis via a system that seems to be total chaos.

        I've certainly had problems with the Royal Mail as well in the past. When I was in my late teens, our local Post Office was raided by the police due to a systematic programme of theft of a

  • ...that's how capitalism works.
    Either a new supplier will enter the field because there's money to be made, or the current services will raise prices as needed and expand.

    I'd expect the latter. It's just that this shit doesn't happen as instantly as analysts seem to think it "should"..

  • "Esp the USPS" (Score:5, Insightful)

    by whitroth ( 9367 ) <whitroth@[ ]ent.us ['5-c' in gap]> on Monday June 19, 2017 @11:25AM (#54648207) Homepage

    Right. Who first was semi-privatized (and Founding Father Ben Franklin, first Postmaster, is spinning in his grave), and then the GOP doesn't want to fund it well enough that they've been cutting back hours and delivery. Same as Amtrak.

    The GOP: Government doesn't work... because we make *SURE* it doesn't.

  • by tgrigsby ( 164308 ) on Monday June 19, 2017 @11:53AM (#54648407) Homepage Journal

    The USPS could build out the necessary infrastructure and at a lower cost than Fedex and UPS, if the GOP would just stop trying to kill them off [crooksandliars.com]. And let's be honest, it's Fedex and UPS lobbyists providing the incentive to pass crap legislation like this. Their entire drive is to hamstring the USPS, because they can't compete long term against a non-profit government agency like that unless they can buy legislation forces the USPS prices up and limits the services that can be provided.

  • USPS has been growing like crazy. They do Sunday delivery now, and they do 3 or 4 delivery rounds in my area per day.

    Years ago you'd only get one delivery round per day (and none on Sunday), unless you paid a ton for registered / certified / whatever the one with real tracking and direct signature confirmation is.

    Maybe USPS isn't growing as fast as they'd like, but ecommerce isn't going to grow forever. In ye olden times, people would pick up their goods themselves from "stores". Today, people want every

  • So now JC Penny is blaming the USPS, FedEx, and UPS for their complete and utter failure to adapt to meet the modern expectations of consumers? Yeah, the shippers are surely the problem, which is why Amazon is doing so poorly, too. Right. Nice try, but we're not stupid, JCP; y'all just suck.

    I am a bit alarmed by the rapidity of the sea change in shopping habits, with so many big retailers closing their doors. But they are only doing so because we (as a whole) don't value the experience they provide and do
    • "We still haven't done much to build out our distribution or source networks, our ecommerce attempts are feeble to non-existent, all of our old customers are dying off, and the damn kids these days just don't respect dinosaur b'n'm retail anymore. But it isn't our fault we suck, it's all on the shipping carriers. We'll show you - we'll close store after store without replacing them with anything else visible. Surely that'll save our business!"

      Obvious prediction for 5 years from now: JCP, Sears, K-Mart,
  • My problem with e-commerce is that there are 3 choices with delivery.

    1. They leave my $1,000 computer out where the locals can steal it.
    2. I have to drive to the middle of nowhere to pick it up.
    3. I have to take off work.

    The odds of them delivering after I get home from work, or on my day off are about the same as me getting eaten by a shark (I live in the Midwest).

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