Issues in Emerging Home Delivery Operations

Topics: FedEx, United Parcel Service, Electronic commerce Pages: 20 (6794 words) Published: April 4, 2013
Park and Regan

1

ISSUES IN EMERGING HOME DELIVERY OPERATIONS
Minyoung Park Institute of Transportation Studies University of California, Irvine Irvine, Ca 92697-3600 mypark@uci.edu Amelia Regan Department of Computer Science and Department of Civil & Environmental Engineering University of California, Irvine Irvine, CA 92697-3600 aregan@uci.edu

ABSTRACT
Despite the recent economic downturn, electronic commerce (e-commerce) continues to show strong growth. According to the U.S. Census Bureau, e-commerce retail sales for 2002 reached at $45.6 billion, an increase of 26.9% from 2001, while total retail sales increased 3.1% during the same period. Although e-commerce sales account for only 1.4% of total sales, the digital economy continues to grow, albeit at a slower pace than earlier predicted. The logistical requirements of e-commerce goods may stimulate greater complexity in supply chain management and potentially cause higher costs in carrier fleet operations. It is important to encourage the development of a freight transportation system that will support the steady growth of e-commerce, while avoiding the possible negative effects from the changes in freight transportation. Advances in home delivery have the potential to promote e-commerce as well as to create sustainable urban freight transportation systems. The logistical challenges of home delivery are discussed and potential solution strategies for the issues that will lead to more efficient and reliable home delivery systems are presented in this paper.

Key Words: Urban Freight Transportation, Trucking Operations, Travel Behavior

Park and Regan

2

INTRODUCTION
Despite the recent economic downturn, electronic commerce (e-commerce) continues to show strong growth. According to the U.S. Census Bureau, e-commerce retail sales for 2002 reached at $45.6 billion, an increase of 26.9% from 2001, while total retail sales increased 3.1% during the same period. Although e-commerce sales account for only 1.4% of total sales, the digital economy continues to grow, albeit at a slower pace than earlier predicted. At the end of 2002 The Economist reported that while conventional retailers faced soft sales, that many e-commerce companies were finally reaching profitability (1). E-commerce enables businesses to sell their products and services directly to the consumers without establishing a physical point of sale. While some products can be delivered digitally to households (for example, newspapers, airline tickets and music CDs), most products purchased online ultimately must be transported to the end-users in the physical world. An efficient and reliable delivery system is essential for gaining customer loyalty online and consequently obtaining profitability, home delivery is increasingly becoming a key element in e-commerce. The logistical requirements of supply chains that extend to each customer’s address may stimulate greater complexity in distribution systems management, potentially causing higher costs in carriers’ fleet operations. An increase in time-sensitive goods results in an increase in the number of delivery vehicles. More frequent home-based local deliveries will likely add to traffic congestion and environmental problems in urban areas, making it more difficult for carriers to meet customer demands. These changes create challenges for the freight community. Over the past several years, many researchers have investigated the likely impacts of online shopping driven by information technology on transportation, including the movements of freight (2,3,4). Although home delivery plays a crucial role in the distribution chain, limited attention has been paid to the issues associated with the home delivery in the transportation literature. A recent exception is the work of Campbell and Salvelsberg (5), which examines consumer direct service problems faced by individual retailers providing home delivery. That work points to the necessity of...

References: 1. 2. 3. The Economist, Profits at Last. Dec. 19, 2002. http://www.economist.com/. Gould, J., Driven to Shop? Role of Transportation in Future Home Shopping. In Transportation Research Record 1617, TRB, National Research Council, Washington, D.C., 1998, pp.149-156. Golob, T. F. and A. C. Regan. Impacts of Information Technology on Personal Travel and Commercial Vehicle Operations: Research Challenges and Opportunities. Transportation Research Part C (9), 2001, pp. 87-121. Lyons, G., Internet: Investigating New Technology’s Evolving Role, Nature and Effects on Transport. Transport Policy 9, 2002, pp. 335-346. Campbell, A.M. and M. Savelsbergh. Decision Support for Direct Grocery Initiatives. University of Iowa, working paper. 2002. Cairns, S., Delivery Alternatives: Successes and Failure of Home Delivery Services for Food Shopping. Transport Policy 3 (4), 1996, pp. 155-176. Nagarajan, A., E. Canessa, W. Mitchell, and C.C.White III. E-Commerce and the Changing Terms of Competition in the Trucking Industry: A Study of Firm Level Responses to Changing Industry Structure. Presented at the Berkeley Roundtable on the International Economy (BRIE), University of California at Berkeley, CA, April 28-29, 2000. Nemoto, T. J. Visser and R. Yoshimoto, Impacts of Information and Communication Technology on Urban Logistics System, Presented at the OECD/ECMT Joint Seminar on ‘The Impact of E-commerce on Transport: Session 4 Transport and Local Distribution’, Paris, June 5-6, 2001. Forrester, US eCommerce Overview: 2003 To 2008, Forrester Research, Cambridge MA, July 2003 http://www.forrester.com
4. 5. 6. 7.
8.
9.
10. Morlok, E. K., B. F. Nitzberg, and K. Balasubramaniam. The Parcel Service Industry in the U.S.: Its Size and Role in Commerce, Systems Engineering Department. School of Engineering and Applied Science, University of Pennsylvania, Philadelphia, 2000. http://www.seas.upenn.edu/sys/logistics/parcelstudy.html. 11. U.S. Census Bureau. Estimated Quarterly U.S. Retail E-commerce Sales. 2003. http://www.census.gov/estats. Accessed July 31, 2003. 12. United Parcel Service. SEC(Securities and Exchange Commission) Filings: Annual and Quarterly Reports. 1994 to 2002. http://www.shareholder.com/ups/. Accessed July 31, 2003. 13. Golob, T.F and A.C. Regan. Trucking Industry Demand for Information Technologies: A Multivariate Discrete Choice Model, Transportation Research Part C (10), 2002, pp. 205-228. 14. United States Postal Service, USPS 2002 Annual Report, 2003. http://www.usps.com/history/anrpt02/ 15. Federal Express. SEC(Securities and Exchange Commission) Filings: Annual and Quarterly Reports. 2003. http://fdx.client.shareholder.com/edgar.cfm. Accessed July 31, 2003. 16. Airborne Express. SEC(Securities and Exchange Commission) Filings: Annual and Quarterly Reports. 2003. http://www.airborne.com. Accessed July 31, 2003. 17. Dynamex. http://www.dynamex.com. Accessed July 31, 2003.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about emerging issue
  • Emerging Issues Essay
  • Target Market Home Delivery Essay
  • Emerging Issue Paper
  • Emerging trends in Operations Managemnet Essay
  • Strategic Management and Home Delivery Essay
  • Essay about Emerging Issues in Consumer Behavior
  • Emerging Issues in Multiculturalism Essay

Become a StudyMode Member

Sign Up - It's Free