Delivery is one of the most awarding things for the memory-challenged. Press a button, forget about it, and a voila–a wonderful new present is awaiting at your doorstop. Could it be AA batteries? What about toilet paper? Pre-packaged snacks? You’ve got it all. What’s lost in the equation is the supply networks that make it possible, the amount of energy that is being used, the money slipping from your pocket, and a shadow workforce that makes it all possible.
In the land of Giants
The consumer supply chain God of the US is Amazon. It’s possible to get two-day shipping almost anywhere in the country, while the company has recently starting rolling out two-hour shipping in highly dense urban areas like New York City. From an analysis by eMarketer, Amazon accounted for about 49.1 percent of online retail in the US. The next closest competitors, according to TechCrunch are eBay, Apple, and Wal-Mart which combined only account for 14.2% of online retail. See their chart:
I say all of this to convey that companies like Amazon are meeting the demand. In 2015, over 103 million Americans shopped online during the Thanksgiving — Black Friday sales event, outstripping–for the first time ever–those who went in person. It’s hard to blame people, either. One look at those Walmart stampede videos and it’s enough to make even the stoutest of hearts stay in bed and order things on their iPhone.
But at what cost?
There’s a hidden cost to Amazon and every single thing you buy online. Economists like to talk about negative externalities, i.e. costs that are passed on to a third party from a business. Think of the environmental impacts of smoking as an example. Lydia DePillis at CNN Business notes some of the more interesting lines about environmental costs for online shopping:
- “In theory, e-commerce can be greener than a bunch of shoppers making personal trips in their own cars: Consolidating products and delivering them on one route to a bunch of homes requires fewer miles on the road.”
- “In a 2012 study, University of Washington professor Anne Goodchild found that grocery delivery can cut between 80% and 90% of carbon emissions, for example, compared to consumers going to pick up their items on their own. However, she says, that calculus changes significantly if items are coming from further away and have to be sent immediately, which creates fewer opportunities for lumping deliveries together.”
- “In general, it’s very difficult to pin down the environmental impact of e-commerce, let alone how much of an effect delivery speed has on carbon emissions. It depends on the layout of each city, the gas mileage of each vehicle and logistics networks that change from week to week. Consumers might even use the time they saved while shopping online to do something else that involves driving. If Amazon delivered everything in electric vehicles, one-day shipping might be just as climate-friendly as individual trips — but in a recent big last-mile investment, Amazon ordered 20,000 conventionally-fueled delivery vans.”
What is the real cost of buying something online? It’s a bit hard to justify buying toilet paper online, shipping it from a logistics center 50 miles away from your apartment or house, versus traveling a few miles to pick it up. Matt Richtel writes in The New York Times that an economy that runs on this “gotta-have-it-now gratification” is a vexing concern for scientists and policy makers. The environmental cost includes a significant amount of cardboard (35.4 million tons of containerboard were made in 2014 and its expected to grow to over 250 million tons by 2025) and emissions from fleets of trucks circulating neighborhoods delivering goods. Ardeshi Faghri, a professor of civil engineering at the University of Delaware says, “Online shopping has not helped the environment. It has made it worse.” These externalities keep adding up.
What does this mean for me?
I’ve become one of those people now. For the smallest of items, I’ve begun to just go to my computer or phone and order them online. I can get it easy and in bulk. Plus there’s a host of companies that are attempting to make my life more luxurious. Too tired to shop for a meal? Enter Blue Apron, a company that ships you pre-planned ingredients for meals. It’s actually a life-saver because the meals are delicious and very easy. Plus they ship in refrigerated boxes. Want pre-portioned snacks? Enter Graze. Companies like GoogleExpress and Uber are entering into delivery. There’s even a company called WeFuel that will deliver gas to your car. What’s next? It’s not hard to predict a future where a lightbulb burns out in your fridge, a sensor detects that it has burned out and a technician arrives the same day, syncing up their calendars with your smart home’s schedule using an AI assistant, and replaces the bulb. Our economies are becoming seamless.
At the same time, to put on my FIRE lens, I think it’s important to factor in the cost of buying all these goods online. According to CNBC, “…39 million U.S. adults have been carrying credit card debt for at least two years, and another 8 million can’t recall how long they’ve been in debt.” That’s pretty shocking and I honestly think a strong portion of those are racked up in inane purchases online.
There’s also an economy of people who work in the sharing and delivery realms. In the push to keep costs down, labor is one of the first considerations. The Huffington Post story “The Life and Death of an Amazon Warehouse Temp” look into the life of Jeff Lockhart Jr. who worked as a seasonal employee for Amazon. The article lists that workers have to walk about 12 miles per shift, are routinely plucked out of employment and generally marginalized. It opens up questions about this shadow workforce, the group of people who make instant deliveries possible.
Delivery has been ingrained in my life for some time. I rarely frequent stores and buy even less, often comparing prices online, but the hidden costs are passed on to others. I’m not looking for instant gratification, merely an easy way to purchase things. Then magically, it shows up. The very hard truth is that it’s going to take a lot for me to change my ways. These ingrained patterns are harder to shake as you get older. Buying toilet paper has now become one easier step.