Home Delivery: Local and Long Distance

Philip Brewer — Mon, 24 May 2010 16:14:25 +0000

If your interests in simplicity and frugality have as much to do with protecting the environment and using less resources as they do with saving money, give some thought to reviving the old practice of home delivery.

Home delivery used to be universal (although just in cities). Period movies show shopping sprees in New York, London, and Paris where the shoppers merely sign for their purchases and move on to the next store, confident that their items will be delivered.

The decline of home delivery is due to two forces:

Households sending every adult member into the workforce, which brings in more cash, but means that many households have no one at home to receive deliveries.
Universal car ownership, which makes it possible for household members to just go and get things (especially convenient when work obligations made it impractical to stay home to wait for deliveries).

Home delivery only works well when there's a certain density of households being delivered to. When most houses are empty throughout the working day, home delivery is no longer practical.

The decline of home delivery opened the way for national shipping companies to begin home delivery of packages, and that, in turn, has allowed home delivery to begin to reappear. See for example Linsey Knerl's description of using Amazon's "Subscribe and Save" service to achieve most of what you could do with local delivery. (And, as on-line shopping began to take hold as the main way many people shopped, many grocery stores began reinstituting some form of local delivery.) The fact that national shipping companies have taken over from local delivery by individual stores means that not just urban folks can have things delivered—a big win as energy prices put the squeeze on rural folks.

From a resource point of view, home delivery wins on almost every measure.

Most obviously, home delivery saves fuel: It takes far less fuel for one delivery truck to drive to a hundred homes than it takes for a hundred people to each drive their own car to the store. It also scales well: If the store doubles its business, it can buy one more truck and hire one more driver (versus doubling the size of its parking lot so another hundred households can make another hundred trips to the store).

There are other advantages as well, although most are conditional:

Having things delivered to your home saves both the time spent going to and from the store and the time spent pulling things off shelves—but only if you're able to effectively use the time you're home expecting a delivery.
If you're the sort of person who's tempted by impulse buys, placing your order by phone or internet can reduce your exposure to the shelves of sodas, candy, snacks, and the like.

Information technology has the opportunity to completely restructure shipping, to make it much cheaper and save vast amounts of energy.

The old model, before FedEx, was for stuff to be stored locally in warehouses, which were supplied by rail, and from which stuff was shipped out in trucks. It was usually shipped to stores, which then did local delivery to urban customers. This was reasonably fuel-efficient, but required large amounts of capital—someone had to own all the stuff in the warehouses.

In the early 1970s, FedEx created the hub-and-spokes model, where everything was shipped to a central hub, where it was sorted and then put back on planes to be sent back out to the FedEx office closest to its destination. Since one warehouse near the hub can deliver overnight anywhere in the world, it saves on capital costs, but it only works as long as fuel is cheap. When fuel is expensive, it does poorly—and the whole model fails for rail or barge shipping.

But maybe information technology can fill the gap. A computer system, programmed with all the available shipping modes, could route packages on any transport that had space, preferring the cheapest and fastest ones. Since it costs almost nothing more to run a full ship (or barge, train, or truck) than one that's half-empty, transport companies could bid to carry packages part-way on a trip, and a package that's not urgent could make its leisurely way (on any number of different vehicles) until it was within local delivery distance.

If information technology can make sure that every vehicle carrying goods is full, we'll save a lot of fuel and a lot of money. And, as a side benefit, recreate the system of home delivery, thereby saving some more fuel.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Save Money and Still Show Love on Valentine's Day

Tisha Tolar — Sun, 07 Feb 2010 17:00:07 +0000

There are the cynics that say Valentine’s Day is a retail racket meant to guilt people into spending too much to prove their eternal love to others, but there are also many consumers who will still go out of their budget to buy some pretty impractical things. The Valentine’s Day celebration often includes expensive jewelry, cards, candy, and flowers but as times change, more people are constricted by tight budgets and obsessing about not being able to do more this year.

Fear not! There is hope for all. Here are some tips to keep your love spirits high, your loved ones happy, and your budget intact for Valentine’s Day.

Order Now

If you are shopping for flowers or shipping candy, you should place your order ASAP to avoid paying rush charges or extra shipping and handling. The beginning of February will signal the start of premium pricing so get your order in now. Flowers in particular may be affected in pricing this year due to the cold weather. Flower suppliers are reporting instances of slowed production, especially for roses which means florists will be paying higher prices and passing along to their customers even higher ones.

A Rose is a Rose — Buy Something Else

Chances are good your gal likes some other kind of flower than just a rose. Long-stemmed roses are the most popular, and red long-stemmed roses are the most expensive. Ask about other kinds of bouquet arrangements that can be made using another favorite flower or color. To save even more, choose something that is in season. If you must get roses, buy just one to present in person or mix other flowers in with a rose arrangement to bring down the cost.

Bring on the Coupons

Many online retailers will be happy to accept a discount coupon with a purchase. There are a ton of sites that offer coupons for popular online vendors including FTD. However, the trick of the coupon game is to get the order in early as many coupons expire at the beginning of February. There is no shame in getting a good deal.

Be Non-Traditional with a Delivery

If you plan to send your sweetums flowers or candy, don’t mark the 14th as a delivery date. This year Valentine’s Day is on a Sunday so you can be assured delivery charges will be higher than normal. Ask for delivery on Thursday or Friday. Not only will you be saving money, you might also earn bonus points for sending gifts to the office early as a surprise.

Agree to Be Frugal

If financial constraints are not a secret amongst loved ones, agree to skip the retail craziness of Love Day and do something free. Visit a museum, have a carpet picnic, stay in bed — whatever it is you decide to do choose it together and enjoy the quality time, which is far more priceless than any gift could ever be.

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This article is from Tisha Tolar of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: