Specialist
Former manager at Amazon.com Inc
Agenda
- Volume growth outlook and key demand risks for US e-commerce logistics
- Inflationary pressures on unit economics and long-term cost drivers
- Logistics in-housing outlook and market share trends
Questions
1.
Given the twin headwinds of inflation and a potential recession, what’s your volume growth outlook for e-commerce in the US and North America in general?
2.
What are the main efficiencies of moving towards using reserve storage for slower-moving product and freeing up space for faster-moving product vs the cost of implementing that change for a platform or third-party logistics player?
3.
What might be moving slow vs fast in warehouses, given the move towards more recessionary conditions?
4.
Regarding the industry growth outlook, you talked about a moderation of volume growth to 5% YoY. Do you expect that to sustain over the medium term as we see a combination of three different factors – stay-at-home orders being reversed and people being let out of their houses, inflation and recession in the background?
5.
What key strategies can e-commerce logistics platforms and third-party logistics players undertake to insulate themselves from macroeconomic headwinds and moderation of volume growth?
6.
We’ve seen a lot of cost pressure in the last 12 months, namely fuel and labour, alongside lead times – things that would generally impact the cost structures of the e-commerce logistics industry. How do you think platforms and their own in-house logistics arms might be dealing with inflation differently than third-party logistics players, if there is a difference in how they handle it?
7.
How can strategies that rely on cost pass-through via price – such as what third-party logistics players can do – impact the industry’s growth outlook? If third-party logistics players add surcharges to the e-commerce logistics platforms, or platforms add charges to the consumer via delivery fees and so on, could that impact the forward volume growth as well?
8.
What do you see as the key cost pressures across the logistics chain in the e-commerce industry? There is transportation and storage at different levels.
9.
How big do you think the problems are when it comes to the labour cost, churn and retention? For major third-party logistics players such as FedEx, there’s a lot of discontent with its ground segment and independent contractors on which the company relies on for transportation capacity. Is labour in short supply and churning too quickly? Is this an industry-wide problem?
10.
Where has there been major inflation or dislocation in rental or acquisition for warehousing and storage?
11.
What has been the impact on the cost per parcel, or the unit cost, given labour and inflation dynamics across transportation and storage? What gets charged to the end consumer or between the third-party logistics players and the platform?
12.
Do you think the potential near-term USD 0.05-0.20 cost per parcel impact is likely to stick in the long term, or could it unravel as constraints abate on the supply chain and the labour piece normalises?
13.
Where are we today in terms of unit cost improvements? Were we starting at a higher base 3-5 years ago, compared to where we are today, so between USD 1.20 and USD 2 per unit per parcel?
14.
Has there been steady progress towards lead times significantly dropping and players being able to access the same-day delivery market? Is that realistic in the next five years?
15.
Amazon already has a really big in-house logistics platform and we’ve also seen Shopify complete its acquisition of Deliverr in July 2022. Will the platforms need the third-party and fourth-party logistics players to fulfil their own logistics needs, or is this at risk of being in-housed in the long term?
