How is it that expedite shipping exists (next-day delivery/ international expedite/ etc) in relationship to standard shipping? Its not like companies benefit or profit from the time the package is in transit. I understand its a “premium” feature but why isnt it ideal to have packages delivered in the shortest/ least time-consuming route, and if so, why arent these shorter/ less time-consuming routes the standard?
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The shortest route isn’t the cheapest route (in general), because a shorter route needs faster transport, faster turnaround in warehouses, etc.
This means the shipping company has a fast, expensive option and a cheap, slow option. The business that is selling something is just passing on these options (and the extra cost) to the consumer.
They profit because lots of people wouldn’t buy their products otherwise. These routes aren’t the standard because they aren’t the most efficient regarding costs. For example, a long drive is cheaper than a quick flight.
I use to ship freight (like single crates at 50-500 lbs each). Anyways, when you needed something super fast, they’d basically find a dude with a van who would drive it there. Like California to Arizona or something. Doesn’t work cross country, but for 1-2 states away we were paying a single guy a couple hundred bucks to chug red bull and drive all night.
And to be clear – the shipping company had a network of freelance truck and van drivers. We provided the crate (signs and graphics) and they’d find a dude with a van.
You’re at work and trying to go home. You can take the public bus which will take 1hr at $2, Uber vanpool which will drive you to your house but you’ll have to stop by 3 houses taking you 40mins at $15. Or Uber solo where you’ll go home directly, no detours, taking you 15mins at $25.
The public bus is normal shipping, Uber vanpool is expedited shipping, and Uber solo is next day shipping. The more you pay, the more it’s tailored to you and the faster it is.
It’s the same with packages. Your package is combined with other ones, like the public bus. But the bus has to makeany stops, so it’ll take awhile to get to your spot. If you want the package faster, you’re basically paying for a dedicated service where the courier will focus on you (but having that dedicated courier is gonna cost you extra).
Optimising for cost and optimising for time is not always the same. For example if a package sorting center end up with a pile of packages which are a bit larger then what fits in one container they can either send two containers and double their cost. Or they can withhold some packages until next day when they will have enough packages to completely fill a second container. Alternatively they might put the remaining packages on a different route to a nearby sorting facility if the container going there is not yet full. When they optimise for cost they do the second or third option even though this delay some of the packages a day. The packages sent as expedited shipping though is sent with the first container.
There are also different shipping methods. Most of the packages today are sent with ships and trains. However trucks can be faster and airplanes are even faster yet. And even for trucks there are cheaper options where the driver take the mandatory rest periods so they can drive the same way all week, and then there are more expensive options where the driver do overtime and have to have a longer rest period at the end of the drive or even have two drivers on the same truck so one can rest while the other drive.
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For normal shipping, they will wait for a container to be filled before it leaves. That would be tomorrow or two days from now.
That saves on shipping costs, but takes time.
For expedited/overnight shipping, that container is departing late tonight no matter what. If it’s a quarter or half full, it’s still leaving tonight to get to you tomorrow.
That costs more because the container could leave almost empty, but saves time.
Major shipping operations use a “hub and spoke” system. Every package travels to one central location, then travels from that central location to its destination. This takes longer than sending the package directly between the two locations, but it requires drastically fewer routes. Suppose you have 100 possible locations that could be origins/destinations. The hub and spoke system takes 99 routes (one each between every non-hub location and the hub). A point-to-point system would require nearly 5,000 routes (one for every pair of locations). This math just gets worse and worse as you add locations.
So it really is more costly to send your package as quickly as possible. When speed is the only concern, the shipping company will either organize a special point-to-point route for the package, or use much faster (but more expensive) shipping methods like planes instead of trains or trucks.
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