With labor shortages, shipping network inefficiencies all over, I propose a thought experiment regarding shipping costs.

In particular, what would have to be true for shipping costs to actually come down in North America?

A few things I think:

1 - A new major entrant from Amazon. Safe to say that many customers riding on the rates of "Customer 1" could have a similar effect to someone like Southwest Airlines entering a major hub back in the day.

or

2 - Hyper-carrier specialization. I think the idea that every carrier can be good at every type of parcel and route is a thing of the past, and retailers are starting to wake up to this idea as well.

or

3 - Hyper-automation in some major aspect of supply chain. Last-mile although a big expensive part, is likely not happening in a serious way anytime soon, but middle-mile and likely then first-mile seems like it would be easier to crack, at least for some use cases.

Beyond that, the tools and software would need to catch up to the value of this kind of specialization in order for merchants to seriously take advantage of it.

#supplychain #ecommerce