Delayed deliveries for your holiday gifts?

This transcript is automatically generated

We're gonna discuss something much more pleasant holiday gifts -- -- -- you know that I said -- -- to correct yes thank you for joining us here with Mercedes distribution.

I was little confusing to explain it to me you warehouse all of the items that are coming to win for all over the country -- does this -- -- -- what they call a third part of logistics provider.

If you have a product or service and you want us to provide that service.

We receive the inventory warehouses receive the orders and distribute view is that because say UPS I was out I think it was in camera Paramus it might have been are sickening.

New Jersey for UPS last year.

And they have this huge warehouse -- was -- distribution center but is it because he at this time here that they don't have enough -- space whether they be FedEx UPS and the other deliveries are.

-- no it does having to -- its base it has more to do with capacity labor.

Was interesting if you saw last week that.

Amazon was hiring 50000.

-- -- I was -- -- -- -- -- -- Phoenix -- -- helmets at all which in my -- there are companies there are countries with armies in -- 50000 so we can see what a big effect that hasn't.

That same article was talking about robots and how robots are really not effective in doing this when it comes down a fulfillment and especially Internet type of fulfillment.

It's nothing like the human hand.

Right that the biggest problem with the Internet it's not your typical warehousing operation where you might have a couple -- you sell when I received the stock I have a a whole palate with a thousand which it sounds very easy to get that into inventory.

You know exactly where to go in fact at Amazon I called -- inventory by chaos what happens at Amazon.

He's every individual item to millions millions upon millions of -- 171000000 and one day -- Cyber Monday.

Each individual item is scanned.

And it's not as if all the dvds starring Keira -- going -- one that -- -- it's a dvd with -- -- goes -- being with -- fox -- -- coffee -- -- -- brand new HP computer and then that didn't get scanning gets sent to an area.

And then the computer tells the picker this item is in this state in that area go grab it out for a box that's going to be going to -- location in the US that's it.

And and before even got there had to come in many items bar coding is so critical in this business without -- -- we couldn't keep up with this type of business.

So you the first step -- you have to receive it and open it up identify it if it's not properly bar coded assign a bar code and then put it away and then as you say inventory by locations what they call it keeping track -- -- -- stock it is just a shotgun type of approach.

Because you cannot he would take you still won't try to consolidate and keep every item together it's impossible push every turns coming back -- -- gonna put them you're not gonna try to.

To match them what you guys have been there is how many -- sixty well we've been in the business since 1947 obviously not on the Internet.

But we've been doing Internet since who late ninety's.

Okay that 47 is a great year that was Studebaker and that of course have you 47 Studebaker is where payments Raymond -- another show up but but how do you feeding into this.

This mechanism whether it's Amazon.com or UPS -- Our our Forte is flash sales -- what I -- boutique distribution and not your typical and flash sales -- very typical when they're in their original does -- small mom and pop store or even a small business -- wanna contract review.

Even as an idea more -- in large volumes okay I'm.

What we're processing tens of thousands of orders every day okay so the small ones would get lost we we've always emphasized a few.

Large customers because whether you're shipping a hundred orders today or 101000 day there's amount of effort that we have to put into to -- maintain a so I'd rather deal with a few large.

Hypothetically and I'm just throwing this out as hypothetical but for instance here in New York City PC Richard.

Potentially could have someone that big and -- -- they coordinate for them so that they don't have to set up a warehouse in north and south that is -- Because it overhead in the warehouse and most of more the labor threat to manage the labor warehouse it's up enough that we just discussed at -- -- thousand people being hired.

Now you've got to maintain has been got to train them you've got to oversee -- you gotta do do all the housekeeping for the and then they're going.

And and you have to be able to could contraction expand based upon that.

All right in this give it to me now I expected -- yesterday world.

What advice you have for people to make sure they get -- yesterday I had the succession last week actually would Stewart.

Stood -- on it yes.

What it is is it's really the cost of of the shipping.

Is that mention too I wish I received as much for shipping.

As the UPS and FedEx do -- got happened be making more money.

The problem is you have to keep their cost down -- -- few small Christmas gifts you know -- T shirts spend twenty dollars he would you don't wanna pay fifteen dollars to get there and that's what you gonna have to pay if you -- senate to UPS and have the regular ground delivered the next day.

So now what they're doing is there are changing that and they're using the post office more or they're using.

Nonunion.

Type of deliveries -- delivery services.

The big one no is is to consolidated and use I'll give it to UPS -- -- -- -- FedEx or DHO gonna send twenty things supposed to tanner five right but what they'll do is and it reduced rate is they'll take that product -- use their own.

Fleet to get across country because I said last week -- the post offices allows you to long haul but they're great at delivering to every home every day.

So what they'll do is they'll take it to drop in the local distribution postal distribution and then they'll put it to the debt the post office have taken from there for that last mile delivery.

Before you continue let's show well everybody some of the numbers that we're talking about for distribution this holiday season these are packages in the millions.

United States Postal Service 365.

Million parcels.

UPS 527.

Million I didn't realize UPS -- is going to be the USPS -- -- -- USPS includes sister holiday card and then FedEx 280.

Look at those numbers don't I wonder if for example fight to consolidated -- where UPS is picking up at the post office is delivering it.

Where those where those numbers would appear there so you'll get like double yet -- -- coming out as if not fit about tea online sales it's growing like crazy are new the new generation.

People are more familiar with an even.

The older generation I think are becoming more comfortable now with buying over the Internet and let's face it wants to get their car -- -- -- lines and everything else.

And even here in the city -- in the -- of course a tornado that's it.

Finally though my -- -- getting online right now -- 1964 Studebaker dealer poster I collect them.

And that the price is fair I've done bottom bunch of these before it got kind of -- them to drive up the price corner the market until -- if you think we're currently the FCC.

But here's my question is should easily 25 but I'm laughing because you know it's two -- to -- a poster you know like -- -- shipment yet -- Not you to appreciate shipped to buy -- slaves carrying it on their shoulders that's really by budgetary now.

The cheapest is the post office and you know.

This came up last week that the post office was was inexpensive it's not inexpensive and post offices is right up there were also.

And you think it depends on the level of service side and certainly UPS is going to be -- 25 dollars by the time you handle it and especially post your -- -- talking got a role mafia put.

But the darned.

To -- -- And doubted -- you know it may seem like a lot but it didn't -- it adds up a bit of advice if you collect Studebaker posters -- any -- -- for that matter please don't sit there with a rubber banks the rubber band guns into the paper and then.

And -- and that and I would that this is -- I'd have you been known that every six to 47 Studebaker hell -- heated up about 800 bucks depending on the long -- -- interesting I -- the sixty force a debate that's another day you'll thank you very hasn't done yet but a wonderful holiday.

You're on the stood on me again up to the -- on updates on.

I generally well to what -- over the hump now.

So once we got past of the week in this last I've relief -- Which you get past that were home free -- week as historic by the way five point five billion in sales in both my clients.

Exceptionally large -- even my smaller ones.

Very very good season now they have to keep the keep the momentum going.

Watch Live

Delayed deliveries for your holiday gifts?

Details

Clips

Latest Video

Asian Markets Mostly Positive Friday

Durable Goods Rise 3.3% in April

Foot Locker Tops 1Q EPS

Abercrombie Reports Greater-Than-Expected Loss

Morning Business Outlook: 5/24/13

Does America Need Energy Independence?

A Real Way to Save on Gas

What Does America Get From a Barrel of Oil?

Markets Not Taking Bernanke Comments Seriously?

Rudy Giuliani on Obama’s Handling of War on Terror

Time for U.S. to Get Tough on China Over Hacking?

Scandals Raising Concerns of Obama’s Leadership?

Transcript

Recommended