How dog food explains the warehouse boom and convoluted delivery practices
Delivery drivers hate moving dog food for the same basic reason that customers love having it delivered: it’s a pain to get it from one place to another.
“It’s heavy. It’s boring,” said Matt Ulricksen, UPS driver in California. “A lot of times it breaks inside the box, so you can hear it shaking inside.”
Ulricksen, who has worked for 18 years, first noticed an increase in dog food shipments about four years ago — and there’s no sign of it slowing down.
Industry analysts predict that the amount of dog food ordered online exceed what is bought in stores by 2025, a change drastically accelerated by the coronavirus pandemic. With some 77 million dogs in the United States, this single change in buying habits is having a serious impact on supply chains.
Of course, it’s not just dog food that is increasingly being purchased online. E-commerce now accounts for about 17% of retail spending in the United States, according to the National Retail Federation, and it’s expected to grow about 12% this year.
The nature of online shopping can mask the effects of this trend in and on the real world. Warehouses are growing closer to neighborhoods and urban downtowns. Trucks rumble more often on residential streets. Delivery people visit certain houses daily. All of this changes the calculations about the resources that go into American consumerism.
Here’s what changes when our stuff comes to us instead of the other way around.
How does e-commerce work?
The path dog food takes for an online order is similar to the route it takes to get to a store, where customers can pick it up, until it reaches what is called the last mile.
Whether imported or made in the United States, a bag of dog food travels through one or more warehouses before it reaches a store or is purchased online. If it’s a physical store, a truck carries pallets or boxes of goods into a store, where they’re stacked on shelves that customers can grab, haul to the cash register, and finally throw in their car.
Things get complicated when a customer orders online and the retailer has to get the dog food the last distance – or so-called last mile – to a customer’s house.
The ways to ship a bag of dog food, or anything else, are so many and varied that an industry of software companies exists just to help chart those paths. There are dozens of logistics companies to move boxes via airplanes, trains, trucks, and vans over nearly endless routes.
The first step is to decide where to ship an order from. In the beginning, a retailer might have two warehouses from which to ship online orders. Today, many have dozens.
Big dog food players like Amazon, Target, and Chewy save money and time by shipping your order from the warehouse closest to you. This is partly why smaller stores are finding it increasingly difficult to compete with them.
“If you order something online from Amazon, it almost certainly leaves your area,” said Alison Conway, who studies urban delivery at the City University of New York. Smaller retailers don’t have the same reach, which means your order is more likely to come from further away. Someone who owns an Etsy store is more likely to rely on the U.S. Postal Service, Conway said, and so their goods spend more time in transit.
The effects of large and small e-commerce retailers have brought drastic changes to the physical landscape.
E-commerce means more warehouses and more trucks
At the start of the pandemic, Chewy, an online-only pet retailer, was shipping orders from eight warehouses. Today it works on 14.
“We continue to invest in our execution capabilities and customer service,” Chewy CEO Sumit Singh said in an April 2020 earnings call. Singh called it Chewy’s “divide.” , but the company isn’t alone in bolstering its shipping prowess. As the number of online orders has increased, so has the number and size of warehouses in the United States.
“E-commerce takes up a lot more warehouse space than in-store shopping” because online retailers carry more items, said Anne Goodchild, who directs the University of Washington’s Supply Chain Transportation and Logistics Center. .
In 2021, real estate giant CBRE estimated the number of warehouses in North America larger than 200,000 square feet — the big ones that online retailers are gobbling up — at 11,500, up more than 40% since 2010. And They’re Hardly in the Boonies. “Very fast delivery definitely brings warehouses closer to homes,” said Goodchild.
In Columbus, Ohio, where warehouses are booming, nearly one in three residents live within half a mile of a warehouse. Residents of Columbus are twice as likely to live near a warehouse compared to the average Ohio, according to an analysis by the Environmental Defense Fund for Insider.
Retailers are getting better at optimizing the relationship between where they stock merchandise and where customers are likely to order it.
It is not easy. When Amazon attempted to reduce Prime shipping times to one day instead of two, it was unprepared for how bringing inventory closer to customers would strain its warehousing and distribution network. logistics. He ended up spending billions of dollars more than he expected on transportation.
When there is no warehouse near a consumer, or when a nearby warehouse contains only a portion of the ordered items, the parcel routes become strange. Have you ever ordered five items online and received them in three boxes over several days? They probably came from three warehouses.
This mess — and the shuffling of inventory between warehouses needed to clean it up — is one more reason why the number of large trucks in the United States grew 14% from 2016 to 2019, as it did according to the latest data available from Federal Motor Carrier Safety Administration.
And these trucks spend more time on smaller roads. “We bring things to neighborhoods that we used to take to stores,” Goodchild said.
The emphasis on speed in e-commerce makes it more difficult to operate efficiently in traditional retail, where shipments are made in bulk and trucks are filled. And that creates a need for more wheels on the road. “You need more vehicles because you can’t fill them when you’re trying to deliver quickly,” Goodchild said.
Even with all these additional vehicles, it is difficult to compare the emissions generated by online orders with those of in-store purchases. As vehicles become electrified and logistics strategies evolve, the math keeps changing.
Another complicating factor is e-commerce returns. No one has really figured out how to handle them effectively, so some returned goods still end up in waste streams.
Then there’s cardboard, which an MIT study published last year found to be responsible for 45% of e-commerce emissions. The the industry is racing in the first year of the pandemic, including adding recycling capacity to cope with the boom, with a estimated at 7.8 million tons of cardboard used in 2021 only, according to Bloomberg and Circular Ventures.
Although it is slowing, the surge in online shopping that began in 2020 has permanently changed the way some consumers shop, and warehouses and the supply chain will continue to try to catch up.
The mess of overlapping networks that bring our dog food to our doorsteps is constantly evolving in search of greater efficiency. But the only thing he can’t do is slow down. E-commerce will continue to grow.
After all, even those who hate delivering dog food see the appeal of having someone else do the schlepping. When Ulricksen’s puppies run out of food, the UPS driver’s wife goes online and orders more.
“You can ask any of these drivers,” Ulricksen said. “They’ll say it sucks – it hurts my back. They always order it online for themselves.”
Alex Davies contributed reporting.