
Walmart stumbles with its 'last mile' package delivery plan - danso
https://www.reuters.com/article/us-walmart-lastmile-workers-insight/walmart-discovers-why-the-last-mile-is-the-hardest-idUSKBN1KK0DD
======
newswriter99
Let's list what Walmart was offering the pilot program volunteers: \- Free TV
or iPad for signing up (hock it* for ~$100 I guess) \- $2 per package delivery
(average 3-5 deliveries per night) \- 54 cents for fuel per mile \- Extra hour
of OT pay (average pay $11 per hour)

All of which the story says adds up to $15.40 for each 10 miles of five
packages, not counting OT. After a week one employee said she got $100 after
~12 deliveries.

All so you can spend an extra 30 minutes at your job waiting for someone
else's groceries, which you will then spend 2 hours to deliver, by hand, to
their (assuming) nice looking house with their nice looking family, as you
then trudge back to your apartment and sit on your Walmart couch, in your
Walmart clothes, eating your Walmart food and watching your Walmart TV.

If that's not depressing I don't know what is.

*edited for typo

~~~
sbinthree
This is kind of a strange comment. I don't think a lot of HN folks have worked
in last mile logistics, but $2/package is average to above average. Amazon
typically pays around $1.50 for Prime packages and I would say it isn't just
the upper middle class that is buying from Amazon at this point. If people
don't pay for shipping, there will be a human cost. If people are willing to
pay for some aspect of value-add (actually coming to your door, caring about
retry attempts, caring about lost packages, caring about how well the people
involved are treated) this would change fast. Anyone who tries to go slower
than peak speed or do it ethically gets crushed by someone doing it faster or
in a shadier way, because people refuse to pay for shipping.

~~~
danharaj
> but $2/package is average to above average. Amazon typically pays around
> $1.50 for Prime packages

That just means working for Amazon is even more abysmal. Last mile logistics
is shitty to human beings period.

~~~
bradly
I know absolutely nothing about last mile logistics, but it's strange to me
that (at least in the U.S.) we literally have someone going to practically
every single house and business 6 days a week (postal carrier), and yet this
is still a problem. I would think leveraging the human already coming to house
every day would be the most efficient?

~~~
brd529
Look up FedEx SmartPost, UPS Mail Innovations, DHL eConmerce, etc. these are
all companies who “work share” with USPS. They deliver the package to the post
office and USPS leverages their existing network of mail carriers to do the
“last mile” delivery.

The problem with these services is that they are very slow. The hand-off at
the post office adds a day. Additionally these are considered economy services
without a delivery guarantee by the carriers so they will wait until they have
a full trucks worth of these before sending them on a leg.

Wal-Mart is trying to get to same day delivery and bringing everything to the
local post office for them to deliver would add at least a day.

Furthermore those USPS economies suffer a bit once packages exceed 1 lb. it’s
often too big for a letter carrier to take on their route - so they’d be
delivered through the priority mail network which is often a different driver
than your daily mail man and does not deliver to every house every day.

~~~
losteric
Given that package delivery is where USPS can profit, I wonder why
Amazon/Walmart don't lobby to modernize USPS so it can cover the use-cases -
why not deliver multiple times per day? There's no greater economy of scale
than "delivering everything to everyone".

I mean, that's a rhetorical question. Obviously they'd both prefer to
monopolize a for-profit alternative to USPS... but it seems short-sighted

~~~
tdfx
There's really no hope of modernizing USPS. The political cost of substantial
investment into USPS is higher than the actual cost of capital. If they want
to control the quality of their service, it can't involve USPS.

~~~
toomuchtodo
Can you provide a citation? My understanding is that the USPS is constrained
by conservatives trying to break them financially by requiring pension funding
requirements drastically beyond what is considered reasonable based on their
workforce. Therefore, USPS could modernize when Congress is replaced with
politicians not working on dismantling the institution through legislation.

“Back in 2006, Congress imposed a huge and unprecedented mandate requiring
that the Postal Service pre-fund future retiree health benefits for the next
75 years and do so within a decade – something no other public agency or
private company is required to do.”

“As a direct result of pre-funding, USPS has reached its $15 billion debt
limit. In 2005, the Postal Service was debt free. Today, it holds $15 billion
in debt – all of it traceable to pre-funding. By forcing the Postal Service to
use all of its borrowing capacity making these annual payments, Congress has
prevented it from investing in new infrastructure, products and services to
better serve American homes and businesses.”

[http://www.deliveringforamerica.com/infographic-the-truth-
ab...](http://www.deliveringforamerica.com/infographic-the-truth-about-postal-
finances/)

~~~
michaelt

      In 2005, the Postal Service was debt free. Today, it holds
      $15 billion in debt – all of it traceable to pre-funding.
    

I'm curious to know more about this.

If I've promised an employee $X of retirement benefits based on years they've
already worked, am I "debt free" by the definition of that article, or do I
have $X of debt?

------
jrockway
I think people forget how entrenched and relatively good the existing package
delivery services are. USPS has a key to my apartment building, so they can
just show up and drop off packages hassle-free. UPS does not have that key,
but they successfully break in every day and leave packages for my building
with no problems. (Spent some time not working and they didn't even ring my
buzzer in an attempt to get in, the packages were just magically in the common
area. No doubt the driver knows the friendly neighbor that is happy to let him
in and do his thing, and knows that the three buildings owned by my landlord
have the same key/super, so can do 3 buildings worth of deliveries with one
buzzer press.)

Meanwhile, the upstarts just don't do this. Whoever Amazon contracts out to
(is it still LaserShip?) just doesn't care about attempting to break into my
building. They show up at 9pm and ring the buzzer, then leave if I don't go
downstairs and open the door quickly enough. They are getting better, though,
as I've seen some random LaserShip packages laying around in the common area.
But I still think "shipped via USPS, this will arrive" and "shipped by
LaserShip, better go pick it up at B&H and cancel the Amazon order".

But anyway, expecting random Walmart employees to have the skills necessary to
circumvent pesky locks is kind of unreasonable. When you do it every day for
years you probably develop a process that works for each building you deliver
to... but when it's a one-off thing for an extra $3... the customer probably
isn't going to get their package. The customer that doesn't get their package
is probably going to order from Amazon. Sorry, Walmart...

~~~
jessaustin
I'm with you on UPS, but among "existing package delivery services" I find
FedEx to be pretty shit overall. At each commercial location I've had in
multiple counties, they have delivered at a giant range of times (e.g. one day
9:20 AM and the next day 5:20 PM) with a lot of different drivers and about a
20% chance that they're busy today so they won't even come around (i.e. the
business was open all day and there is no tag on the door) but they'll still
flip the status to "customer not present". I've bitched to Amazon about using
FedEx a lot, and now it seems they don't use FedEx for me very much anymore...
of course other stores haven't gotten the message.

~~~
bunderbunder
I suspect that FedEx's delivery is so crap precisely because they get a lot of
the Amazon business.

------
fma
It's amusing to me how out of touch executives are. Some executive makes a
decision for this and everyone is too scared to tell them it's a stupid idea.

This happens where I work, too.

They could have had the employees deliver for 10 hours of their 40 hour shift
so they aren't exhausted while driving. Have the employees do it during the
shift rather than after which is likely during rush hour. Give employees
consistent routes they are familiar with. If there's a package to deliver ok
that route...great. if not, then do the regular associates job. Company
vehicles to reduce burden on your employees who make $11 an hour. Buy some
Chevy Bolt that can be charged at Walmart. It's also hatchback so store lots
of stuff. Plaster Walmart ads to increase visibility of the service. A clean
looking new car will increase branding.

This is the largest retailer in the world...don't act like a poor startup.

~~~
sumedh
> Some executive makes a decision for this and everyone is too scared to tell
> them it's a stupid idea.

Or the executive tells them I am the Big Boss and this will definitely work.

~~~
BEEdwards
And everyone is to scared to say, "yes you're the big boss, but this idea is
still dumb and won't work. Let's at least go on linkedin and try to poach at
least one executive from amazon flex."

------
slimsag
It's ironic that Walmart has such a huge logistics problem in this area,
because IMO Walmart and Sam's Club have insanely good logistics when it comes
to getting product to their actual stores. They are by far in the best
position to do grocery delivery, if only they could figure out 'last mile'
delivery.

The vast majority of people have rapidly moved to purchasing things from
Amazon, and this leaves Walmart in the dust. Yes, fakes are an issue etc. but
most people don't know that. All they know is that Amazon is easy, they
_think_ it is cheap, and that Amazon will resolve any issues they have when
e.g. getting bad items.

Amazon historically (and still kinda does) have a problem with getting
perishables logistically to last-mile delivery points, whereas Walmart and
Sam's Club have already figured this out and done it for a very long time.
There are TONS of places in the U.S. that do not have a Whole Foods nearby,
but have a Walmart or Sam's Club just a mile or so away.

But Amazon is quickly catching up with its acquisition of Whole Foods, etc.,
and Walmart seems incapable of letting consumers just pay more to actually get
this service like Amazon or Instacart do.

~~~
allthenews
>Amazon historically (and still kinda does) have a problem with getting
perishables logistically to last-mile delivery points, whereas Walmart and
Sam's Club have already figured this out and done it for a very long time.

I don't think getting groceries to store shelves counts as "last mile." The
entire problem with last mile is that instead of delivering a truckload
singular location, one is many delivering tiny shipments to scattered,
irregular locations, which is substantially more time, labor, and fuel
expensive, not to mention logistically more difficult.

~~~
slimsag
Totally, that was poor wording on my part. Instead of "last-mile delivery
points" I should have said "warehouses (or stores) where last-mile delivery
shipments originate". By purchasing Whole Foods, they solved a large portion
of this, but the number of Whole Foods stores still is tiny in comparison to
Walmart/Sam's Club (I think, I couldn't find numbers sadly)

------
jsumrall
If you think last-mile logistics is interesting, come check out Picnic in the
Netherlands. We're an online-only supermarket. We do milkman style deliveries,
where we have a few fixed times per day that the customer can choose to have
their delivery (20 minute window), allowing us to make the routing efficient
and fast, enough that we can do free deliveries. This overall seems to be
working better than Walmart's approach.

We've got a pretty solid tech team, and always looking for more people to
join. [https://blog.picnic.nl/](https://blog.picnic.nl/)

~~~
karambahh
Had the pleasure to interact with PicNic CTO in their past job and met PicNic
tech team at various conferences in Europe: top talent with a great team
spirit working on many interesting topics.

PicNic is a bit puzzling for traditional retailers. I interact with C-levels
execs of "traditional" retailers in Europe and very few have heard about
PicNic. When they realize what PicNic achieved in the NL, basically "solving"
the last mile problem they all have, they usually are quite impressed.

Obviously, last-mile delivery is highly country specific: sociology and urban
planning/population density in the Netherlands is very different to any other
European country. Attempt to roll out the PicNic model in Scandinavia (roughly
the same population size) would be a completely different story.

As an outsider, I'm wondering what PicNic next move will be. My money is on an
international expansion into Germany, starting with Dusseldorf and its lander
(similar population density and size).

~~~
jsumrall
You guessed correctly!

[https://ecommercenews.eu/dutch-online-supermarket-picnic-
exp...](https://ecommercenews.eu/dutch-online-supermarket-picnic-expands-
germany)

Indeed some things work great in the Netherlands which might not work well in
other places. But even if we have to change some parts of the delivery model
to adapt to other markets, I think the high level concept has a high chance of
working.

~~~
karambahh
I do agree. You're in a much better position than your competitors: easier for
you to win on the delivery market in the FR than, say, for Carrefour or Auchan
to solve it. (which they have attempted to solve for the last 10 years with
varying degrees of success)

------
kennydude
I don't get how this is a major issue.

Most UK supermarkets have an online delivery service (even Iceland!) You pick
a delivery slot for a certain price (off peak is cheaper) and then choose what
you want.

They have store assistants with specific trolleys with plastic boxes for each
order and fill up as they walk around the store. Boxes get loaded to a
specially designed truck and delivered in the time slot.

Works pretty well, unless you're this person
[https://www.reddit.com/r/britishproblems/comments/2sxjiv/tes...](https://www.reddit.com/r/britishproblems/comments/2sxjiv/tesco_home_delivery_substituted_my_kingsmill_5050/)

~~~
deadbunny
Haha, that link reminds me of a substitution I got one time. Frozen garlic
cubes were replaced with frozen mixed veg.

I thought it was a little odd at the time till the next time I was in the
store and noticed the frozen garlic cubes were right next to the frozen mixed
veg. So rather than apply logic and grab some other type of easy garlic they
just grabbed the thing next to it. I actually facepalmed.

------
jackconnor
Spoiler alert: They didn't pay their employees enough for the deliveries, and
these employees ended up averaging about $7/hour to make deliveries. If they
fixed this (seemingly) basic problem, I wonder how well this would work.

~~~
CydeWeys
$7 per hour _using their personal vehicles and insurance_. And personal
insurance might not even cover these accidents.

------
cavisne
"All sixteen workers who had participated in the program said delivery of five
packages would generally take them more than two hours to complete. If a
worker drove 10 miles to drop five packages, that would earn them $15.40 in
compensation per package and fuel, before overtime pay."

They clearly just dont have the density of orders for this to work. Theres
videos on youtube of the amazon flex app, a 2 hour shift with a car full of
boxes is mostly within a couple of blocks.

------
sjg007
One idea would be to pay customers to deliver packages. Then you can
incentivize them to come in to buy something and then take and deliver some
packages for you.

~~~
theunamedguy
It'd be much harder to keep people accountable. Who do you blame when the
product arrives damaged (or not at all)?

~~~
sjg007
There's probably some way to incentivize good behavior. I would do it for my
neighbors within reason. That being said Amazon is still leading the way,
maybe Walmart can do USPS for the last mile as well.

------
sxp62000
I wonder if Whole Foods, Wegmans or Trader Joe's would be more successful at
an experiment like this. I can't imagine anybody working at a Walmart store
trusting their employer with schemes like this.

P.S. Their new website homepage doesn't show any prices. It feels kind of
dishonest.

~~~
Kalium
That's such a good idea that Whole Foods is already doing it. You might know
it as Amazon Fresh.

~~~
sxp62000
Whole Foods employees pick up stuff and deliver it to homes after their shift
is over at the store?

~~~
Kalium
Amazon employees do. And Whole Foods has an Instacart partnership
(delivery.wholefoodsmarket.com) from before they were acquired.

~~~
sxp62000
But that's not the same as a walmart employee finishing work, and then driving
stuff to people's homes. Am I missing something?

~~~
Kalium
I am admittedly abstracting a little bit, from this very particular program
structure to the general problem of retail outlets doing home delivery to
regular consumers.

I suspect Amazon-owned companies are unlikely experiment with the particular
structure Walmart is trying. It feels like Walmart is trying to solve a very
particular problem that most other companies might not have.

------
ddebernardy
If memory serves me well, a few store chains in Europe are exploring
approaching this by flipping the problem on its head. Rather than delivering
the goods at the customers' houses, they stick to having the local store prep
the orders and then having customers show up at a glorified drive-through.

Aren't there grocery stores in North America trying that approach? For all
they know it might prompt a startup to actually solve the last mile problem
for them, in much the same way as there's a startup or three out there that
offer restaurant deliveries for places that don't support it out of the box.

------
reviewmon
Reminds me of kozmo.com
[https://en.m.wikipedia.org/wiki/Kozmo.com](https://en.m.wikipedia.org/wiki/Kozmo.com)

~~~
samstave
I recall buying DVDs from kozmo in 1999 and having them delivered by bike
messenger to my office.

I was on a flight with the founder in 2000 one time telling them how much I
loved it and making suggestions about what is love to see, but also expressing
how surprised I was that they could make a profit... They folded soon after...

I still remember the last time I bought from them: Ran on DVD

------
swagasaurus-rex
TLDR:

> Walmart’s associate delivery pilot program [...] started with store managers
> pitching employees an unusual new way to boost pay. Those who passed
> background checks could moonlight as drivers for the Walmart.com delivery
> service, they said.

> Fourteen of the sixteen Walmart employees told Reuters that they were put
> off by the program’s poor compensation. And all of them expressed concern
> over who would be responsible if they got into an accident or if merchandise
> was lost.

~~~
dv_dt
If you can't build it without being propped up on the risk of others, then you
don't really know how to build it.

~~~
Avshalom
"To be fair" that sounds straight out of the play book of "growth oriented"
companies in general.

~~~
dv_dt
Well there is a time element of how long one deals with the unknowns, but this
is Walmart. A fortune 500 (100? 50?) company has the resources to skip most of
the bootstrapping shortcuts and make a serious go at it to do a good eval.

~~~
amch
Walmart is the Fortune 1, FYI:
[http://fortune.com/fortune500/](http://fortune.com/fortune500/)

------
theshadowknows
Or people could wait a damn day.

------
joering2
Gee, who here didn't foreseen an idea of strangers coming to your home to
deliver after they can't wait to end their shift already (and go home) won't
work.

The article mentions billions put into figuring out how to tackle on Amazon
success. Here is the plan, free of charge:

Ask anyone why they chose Amazon over Wallmart, here is the answer: Both
Amazon and Walmart has large range of goods, but Walmart lacks in reviews;
offer perks and discounts (on products you have problems to sell) to those
"good Wallmarters" who are willing to spend their time reviewing products
online and you fix half of the problem. Make reviewing possible only to person
who purchase a product from Wallmart to compete with horrible fake reviews
that Amazon is plagued with.

\- Have ONE designated person (or few people) delivering per store and made it
their full-time job to deliver. The reasons I hate going to Wallmart are: 1)
lack of short-distance parking lots [takes me 10 minutes to find a spot, sorry
I'm lazy]. 2) confusion of where a product is [take me extra time to walk and
find an isle]. 3) checkout time and lines are ridiculous [being 24-hour open
doesn't mean much when there is only one clerk at the night shift, so waiting
time is the same at rush hour]

\- So have that ONE designated person: have their own reserved parking spot,
have them handheld access to know where products are, have them skip checkout
since products are paid online. Have them smart online app to deliver
throughout the day, back and forth as many times as sophisticated algorithm of
said app decides its the wise route possible.

You welcome, Wallmart!

~~~
ghaff
It’s not a service I use but my local Walmart is pushing curb side pickup of
online orders. So is one of my local grocery chains. It isn’t really a use
case that appeals to me and I don’t much like Walmart for food shopping
anyway. But that addresses your specific complaints.

------
eblanshey
What about using Uber/Lyft for deliveries? There are dedicated people already
willing to drive their own cars to transport things.

~~~
Nerevarine76
The article says "Earlier this year, Reuters reported the retailer’s delivery
partnerships with Uber and Lyft ended after the ride-hailing services
struggled to deliver people and packages together." So sounds like they tried
it already and may have had logistical issues.

~~~
GarrisonPrime
That sounds like they were trying to do deliveries and ride hails at the same
time, and would struggle to get the deliveries done because they were getting
interrupted by the hails (or had horrible hail rates because deliveries took
them out of the hot zones).

It may have worked much better if they didn't comingle the jobs, and had
dedicated horus for deliveries separate from giving rides.

------
pkulak
I know this is an extreme comparison, but Walmart reminds me a lot of
Blockbuster. I remember Blockbuster thought it would be fine because of
physical stores all over the place. They thought they had a plan to leverage
that, but they never could. Turns out no one cared about the physical stores.

~~~
wpietri
Blockbuster's failure will be an important example for Walmart just as soon as
people can download groceries, clothing, toothpaste, and lawnmowers.

~~~
JumpCrisscross
> _Blockbuster 's failure will be an important example for Walmart just as
> soon as people can download groceries_

Was Blockbuster killed by streaming? Or Netflix swapping rental from an _ad
hoc_ retail to a delivery subscription model?

~~~
twblalock
The popularity of Redbox demonstrates that some people really do appreciate
being able to drive to a store and rent a DVD. Blockbuster probably died
because enough people switched to Netflix that the overhead of running stores
outgrew the revenue. Redbox then swooped in with automated kiosks and were
able to serve Blockbuster's remaining customers.

