Lq presentation-d metzler-v3.0

September 26, 2013 Executive Exchange

Emerging Trends and Innovations:

By: Dick Metzler, Transportation Marketing and Sales Association

September 26th, 2013 Executive Exchange

A Focus on eCommerce Fulfillment … Now and the Future

September 26, 2013 Executive Exchange

Me:

Quick Introduction:

Value Proposition:

•Knowledge

•Connections

•Recognition

•Solutions

• 300 Members

• $300B Revenue

• $190M Budget

• All modes plus transit, media and suppliers

… and others in T&L

Board Roles:

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September 26, 2013 Executive Exchange

What is Innovation?

“The term innovation can be defined as something original and

new that ‘breaks into’ the market or into society.”

According to ->

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September 26, 2013 Executive Exchange

Discussion Outline:

• A quick walk down memory lane

• What is driving eCommerce Logistics?

• Examples of e-trends that are emerging in various shapes and forms

• What does it all mean?

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September 26, 2013 Executive Exchange

Past Innovations: Containerization

In 1956 Malcolm McLean became the “father of containerization” …

… no matter what the Brits claim to the contrary.

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September 26, 2013 Executive Exchange

Past Innovations: Federal Express

In the early 70’s Fred Smith created a market no one thought was there.

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September 26, 2013 Executive Exchange

Past Innovations: Intermodal

Intermodal, stack train and land bridges have changed both domestic and international supply chains forever … one reason

rail is “cool” again!

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September 26, 2013 Executive Exchange

Emerging Trends: eCommerce Fulfillment

E-Commerce CAGR = 14%, “Showrooming” is real, retailers are scrambling

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• 2013 Retail eCommerce = $258.9B

• 20-60% of all shopping visits involve “showrooming”

− 50% smart phone users research in store

− M-Commerce is 18.7% of total

− <10% buy from retailer’s website

− 53% buy from Amazon

− Average order value = $281

• UPS 40% B2C; Redirect delivered 20% of Surepost volume in Q2

Source: eMarketer, January, 2013; Stifel September, 2013

September 26, 2013 Executive Exchange

Emerging Trends: Amazon

Is Amazon using fulfillment to sell stuff or selling stuff to become a 3PF?

Can Amazon continue in it’s current form given the high costs?

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September 26, 2013 Executive Exchange

Emerging Trends: “Crowdsourcing”

Few clear plans for profit and scale ... and no consumer same day mandate

Headline: Wal-Mart may get customers to deliver packages to online buyersReuters – May 28 2013

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September 26, 2013 Executive Exchange

Emerging Trends: Store Fulfillment

“Empire Strikes Back” with SFS, STS, BOPIS and Omnichannel Marketing

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September 26, 2013 Executive Exchange

Emerging Trends: Delivery Lockers

Basically a drop box in reverse, but may not have same convenience factor

Drop Box

Avoids P/U Cost

Lockers

Avoids Residential Delivery cost

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September 26, 2013 Executive Exchange

Emerging Trends: 3D Printer

One in every home and business in the future? Already for more than prototypes and service parts? Implications for fulfillment?

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September 26, 2013 Executive Exchange

Emerging Trends: 4,000 MPH Freight

New York to Hollywood, CA in 45 minutes ... Maybe, but not anytime soon.

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September 26, 2013 Executive Exchange

What Does It All Mean? Our industry has had a rich, but spotty record in innovation over time.

− Some created new solutions and new ways of doing business, and …

− Others were convergence of existing services and solutions.

The “Wild West” of eCommerce is revenue and marketing driven.− Some may never be scalable and cost-effective (or maybe not yet?).

− Maybe some of us old freight humps just “don’t get it” – OR -

− Maybe adult supervision could help with feasibility, scalability, profitability.

− Maybe the old and the new need to come together to create innovation, scalability and cost-effectiveness.

Who knows how this will sort out, but it would be a big mistake for legacy T&L to ignore the new world order being driven by eCommerce.

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