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Sit and Deliver

Oct. 19, 2015
In the new world of uber-logistics, we can all be our own fulfillment centers.

By now we've all heard the frightening statistics about the truck driver shortage, but these numbers bear repeating. According to the American Trucking Associations (ATA), there's already a shortage of as many as 48,000 drivers in the United States right now, and if current trends play out over the next decade, that number could swell to 175,000 by 2024. The reasons for this shortage are familiar: undesirable working conditions and lifestyle, too much time spent away from home, onerous regulations that make it tough to earn a decent living, etc. Nobody, it seems, raises their hand anymore in high schools when the question is asked, "Who wants to be a truck driver when they grow up?"

Meanwhile, the omni-channeling of America continues at runaway speeds, with manufacturers and retailers alike trying to figure out how they can deliver products ordered in quantities of one to end-consumers who are willing to pay a little bit more—but not that much more—for same-day delivery. If it's already next-to-impossible now to find truck drivers, who's going to deliver all this stuff in the future?

The answer, based on recent trends, could very well be: you and me. Maybe we'll be our own deliverers.

Amazon is certainly betting on what's being termed "the gig economy" as part of its strategy to get products in the hands of consumers as quickly and efficiently as possible. At the recent Council of Supply Chain Management Professionals annual conference (CSCMP 2015) in San Diego, Dave Clark, Amazon's senior VP of worldwide operations and customer service, openly recruited for the new Amazon Flex service, a delivery network that relies on independent drivers. These drivers, Clark emphasized, can earn "a very good living" (i.e., up to $25 per hour) using their own cars, picking up packages at local warehouses and delivering them to customers' houses. It's kind of a combination of the Domino's, Uber and UPS models, with even more emphasis on speed and technology (Amazon Flex relies heavily on mobile routing capabilities to direct drivers to their destinations). In keeping with the new rules of the gig economy, these drivers will cover their own costs (vehicle, insurance, fuel, maintenance) in exchange for working as often as they'd like. It could very well be that Amazon will pay you to go pick up your own order.

Amazon is only the most recent example of a company attempting to accelerate the concept of "instant gratification"—not only for its customers, who can now pay $8 for one-hour delivery of certain products in certain cities, but even for its drivers, who can make a little money as a part of Amazon's supply chain network without having to actually, you know, be an employee of Amazon. At the recent Material Handling Institute annual conference in Jacksonville, Fla., David Butler, VP of innovation and entrepreneurship with The Coca-Cola Co., spoke about a company Coke has helped launch called Wonolo. This start-up has developed an Uber-like app that finds temporary staff to do things like restocking retail shelves with Coke products.

As with Amazon Flex, part of the appeal Wonolo makes to potential workers is participation in the on-demand "gig" marketplace. On its website, Wonolo tells prospective users: "Work now. Get paid. Live life on your terms. Don't let job schedules run your life. Wonolo connects you with immediate hourly or daily jobs from the biggest and best brands, allowing you to work where you want, when you want, for whomever you want." Just don't ask them for healthcare coverage.

"Most established companies struggle with the speed and flexibility they need to stay ahead of the digital revolution," Butler notes. By investing in start-ups like Wonolo, Coke is able to participate in the new economic realities driving the Millennial workforce while encouraging new business models that might not necessarily be embraced by Coke's century-old corporate structure. Wonolo, in effect, is itself a gig company that helps line up gigs for other companies.

As Grace Woo, director of supply chain sourcing strategy with consumer goods manufacturer McCormick & Company, said at the CSCMP 2015 show, "To be successful in e-commerce fulfillment, you have to shift your focus from moving stuff to moving data." It could very well be that as technology and demographics shift the nature of work itself, your last-mile fulfillment will increasingly depend on people whose tenure with your company can be measured not in years, but in minutes.