Throttling a spike using price forces everyone to pay the marginal rate, and to use price as a "good" throttle requires the logistics companies to have perfect knowledge of the demand/price curve.

Given that shipping can be a significant price component for multiple types of e-commerce, transparency on when they can issue their final "get it by Christmas" sales with their standard/deterministic pricing structure.

> Throttling a spike using price forces everyone to pay the marginal rate, and to use price as a "good" throttle requires the logistics companies to have perfect knowledge of the demand/price curve.

Not really, you just keep raising prices per day until it gets to the rate you want. If you want more packages lower the price.

I have no idea why you think something that has been done since the foundation of capitalism is somehow completely foreign or impossible to compute or experiment with. Unlike in an economics class companies will never solve the two equations to perfectly maximize the profit, it's more of a range and they're hoping to get close enough. That's a much more realistic approach that has historically worked.

High-volume shippers have contracts with carriers, often more than one year in length. Some of them are referenced to the retail rate. Many though are defined price (including surcharges) with annual escalations. Parcel carriers have been disrupted to some extent by Amazon building out their own logistics capability both line-haul and last-mile and have been signing contracts with non-Amazon shippers to ensure they could cover their costs and make a profit.

Now, pandemic hits and drives a lot of unexpected, probably just this year, traffic into parcel shipping that would have otherwise been freight to stores and passenger car to homes and there's not enough capacity.

There's not as much price shaping they can do without being in violation of their contract. In a lot of cases, they know they need these big shippers next year as well, so they can't entirely burn them this year even if they were willing to litigate the contract.

It's an interesting contract, that locks in a price for a service but not whether the service will even be available.

This works if you don't care about churn, or necessarily moving a certain number of units/preserving capacity on a given day. As there are only 17 days until the theoretical peak delivery date there isn't much room to adjust. A miss-price on December 20th may cause you to sell out remaining capacity or worse favor one customer over others.

A second price auction market for available capacity could allow the market to adapt fast and transparently to available capacity.

The real answer is it’s politically incorrect to do that. Refusing service is cheaper than raising prices. Raising prices introduces all kinds of media and government scrutiny with unquantifiable downside. It’s the right thing to do but not the political thing to do.

I believe they had been, and perhaps still are, charging per-shipment fees to "high-volume" shippers. And that is good in that it is leveling the charge on the culprit (the ones benefiting from e-commerce the most). Retail shippers already pay more and that wouldn't hit the source of the problem. And most shippers have contracts that may prevent sudden price increases based on volume (typically volume is rewarded).

They did as everyone can just pay over the counter rates without issue, because you can ship anonymously.

Nobody is shipping 500 packages/day over the counter.

I would love to try this one day as long as the Benny Hill song can play in the background as I make trips from my van into a retail UPS store.

I helped a friend pack and ship a successful Kickstarter campaign. The first time we showed up at the UPS store with a minivan full of boxes they made us set up an account. They had no interest in an "anonymous" transaction for more than a couple packages.

Don't be a slacker. You have to bring in one at a time. If they kick you out you gotta move on to the next UPS store.

I have a friend who works in a UPS Store. He has been working 10+-hour days for the last two weeks, on top of a bicycle commute (which will sometimes turn into an hour-long walk if the winds are bad), picking up groceries, etc.. They have as many employees as they are allowed to have (given the store size), and right now the work is never-ending.

> I would love to try this one day as long as the Benny Hill song can play in the background as I make trips from my van into a retail UPS store.

Please don't do this, or even joke about it.

Seriously. The UPS store I go to always has a line, usually extending out the door due to 6' distancing, and it probably would not literally hold 500 average-sized packages. I know it certainly would not hold 500 additional, average-sized packages.

The UPS store I go to sometimes has one other customer.

Can I ship you a package to ship from your UPS store?

This was my thought. I was just at a UPS store and there was nobody else there. I assume some are just busier than others.

FedEx would only pick up 110 Letterfolk packages per day ... Galbraith had a queue of 3,000 orders waiting to go out.

There are 26 UPS stores in San Francisco for example. 10 packages at each location per person is hardly going to raise red flags. Use multiple people and add in FedEx and you could probably cover their 3k package backlog in one day. It's not going to cheap or scalable, but you can bet some people are going that route.

I commented similarly elsewhere, but in my experience UPS won't ship more than one or two packages without an account. Red flags will definitely be raised if you try to smurf package shipments.

Interesting, that's not been my experience.

To start with, the business account is not only about paying a better rate. It's relevant for your internal accounting, taxes, etc...

You can't just start handing out business credit cards to everyone you send to the store, the alternative is to ask employees to pay out of pocket and pinky swear to reimburse them.

Then there's the question of liability. If your business account shipped something, any questions of liability are clear cut and easy to deal with. If a random employee shipped something, who's liable for any issues?

And how about efficiency? Not only are you paying a reduced rate with a business account, but the provider comes and picks up your packages from you on a regular basis. If instead of putting things in the right place and answering the door when the UPS driver comes by, now you're paying however many employees to pick up a bunch of packages, drive over to the closest location, and wait in line. I don't know what the lines are like at UPS right now, but I do know that the USPS lines around me are about 45-60 minutes depending on the time of day. Not to mention that line starts outside in the cold.

And that's all assuming your employee brings 20 packages to the clerk and has no problems shipping them all in the same transaction.

Which means it's possible that your employee(s) didn't do their normal job, got frustrated and cold and risked infection standing in line instead, you paid a premium to do so, and some of your packages didn't get shipped regardless.

> the alternative is to ask employees to pay out of pocket and pinky swear to reimburse them.

Uhh, fwiw, if you tell an employee you'll reimburse them for something they do for your business, it's got a little bit more heft in a court than a "pinky swear."

Thanks, I hadn't considered that. What about if you cross your fingers?

My post was to point out the absurdity of the claim that a business account with UPS/FedEx is nothing more than a discount. The part you quoted is a joke, and is not to be taken as legal advice. I am not a lawyer, and also IANAL.

You're not giving legal advice, you're just... casting aspersions on the process of a business asking for you to file an expense report, for some reason, when it's a perfectly normal thing at many businesses (and one that I have performed hundreds of times myself, because ugh consulting.)

Like, you could complain that the reimbursement process is a tedious paperwork-generator, maybe, if you think your other objections aren't enough already?

I really don't understand your position at all, but it seems like you're more upset than I would expect given the context.

In good faith I will refrain from joking about expense reports in the future.

I did not intend to cause offense, I just saw room for a joke I thought would lighten the mood of the post a bit by making it seem more childish. I'm not trying to demean people who file expense reports or something.

I was just taken aback by what seemed to be a vague and completely unnecessary “employers can never be trusted and employees are suckers” sentiment in the middle of coherent words. If it was a joke it undermined the serious points.

If you have low-wage workers, it simply isn't practical to ask them to float you hundreds of dollars in shipping costs. It's great that as a consultant you can do that. It might be useful to realize that most Americans are in a very different financial position.

Yeah do that and they detect it (you better believe UPS and FedEX have EXCELLENT analytics) and they put a hold on your account and if you rely on shipping you are screwed.

You don't play stupid games with a critical part of your business operations.

If anything it just stresses the need for businesses to have more contingency plans and supplier/partner depth. Yup, it's not as cheap as winging it with a sole provider for the best deal you can get but you also won't be in a situation where you are screwed at a critical point in your business calendar.

Business operations - so much fun!

One reason may be that they are already at capacity for shipping and they simply cannot pick up any more packages.