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Amazon’s existing carriers couldn’t meet


service needs in December 2013, and as more online shoppers come to expect free two-day shipping, the risk of additional service failure in-creases. Brent Williams has been conducting


research on customer preferences and expectations when there is a stock outage at a brick-and-mortar store. Looking at the influence of speed and the influence of convenience, his research team found that preference is for speed when re-placing that out-of-stock item. Williams argues that there’s a dissonance between consumer demand for speed and an understanding of how much it costs. “I think a real question has to be asked of


ourselves as consumers, how much of the speed are we willing to pay for? Right now, so much of the cost in online from a shipping standpoint is not exposed to us as the consumer, so if I expect free shipping, in reality, we know that the shipping really isn’t free.” Whether speedy shipping costs are passed


on to the customer in a transparent, line- item way in the future is anyone’s guess, but


Amazon as a new player in the logistics market, there could certainly be a real impact based on the size and influence of the company. Voss doesn’t see Amazon clearing the


obstacles of building a sophisticated carrier empire any time soon, particularly when it comes to drones. “Tis is a somewhat pie in the sky thing. It sounds good. It’s a great idea, but there are so many regulatory hurdles that [they] will have to jump.” What circumstances need to exist for this to


really be a game changer? “IF” he stresses, “it’s successful on a large


customers don’t seem to mind the fee rolled into a subscription service like Amazon Prime. Tey do seem to want their deliveries even


faster than the two days allowed in Prime membership shipments; Amazon has recently rolled out one hour delivery on certain orders in select cities.


SO HOWDOES AMAZON’S RACE TO THE CUSTOMER AFFECT TRUCKING? Amazon won’t be putting trucking


companies out of business, but if we do see


scale, then there could be an impact on the industry. It will have some impact, for some carriers, in some lanes.” He emphasizes the qualifier some. Williams agrees that it’s too hyperbolic to


call Amazon’s entry into the industry a “game changer” or “disruptive.” “My view tends to be that it will increase


competition, and I actually think that it will make the carriers even better at what they do. But I suspect that anytime that you introduce competition, the margin is just going to get more


We know the nuts and bolts.


Only one third* of transportation decision makers are very confident their business is properly insured.


With nearly 70 years of experience, Northland knows the transportation industry. Our coverages are designed to provide the best possible protection for you. Trust that you will have the coverages you need. That’s the Northland Advantage.


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* Travelers 2015 Business Risk Index © 2015 The Travelers Indemnity Company. All rights reserved. M-16993-2 Rev. 10-15


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NEBRASKA TRUCKER — ISSUE 2, 2016 — www.nebtrucking.com


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