[edgeform]

Interesting to apply this to the logistics industry, specifically with freight movement costs. A company might use Joe's Trucking for 80% of their shipping needs, but Joe doesn't have trucks that can take a last second shipment to an important customer. So the company calls Hank's Trucking, who specializes in those last second fulfillment.

Both Joe and Hank enjoy the account because both fall into the upper-right quadrant in the article: they're tuned to keep the company's account high margin, and the "drop size" (volume of shipments in this instance) works fine for both outfits. Joe wouldn't want to only do two moves a week for the company, and Hank wouldn't want to do 50.

[tonyedgecombe]

Distribution is a low margin business. I suspect the attitudes and practices that help you thrive in that environment would push people like Hank away.

[huggybear]

Interestingly there’re actually decent margins in some areas for vendors that provide extra value like in the example. For instance, FedEx provides logistics services for manufacturers and will manage inventory across various regions to make sure your UK warehouse doesn’t end up with a stockpile of unsold goods while your US warehouse has a shortage. No idea how good a job they do but I know it’s a service they will provide on top of distribution for a significant fee.

[edgeform]

> Distribution is a low margin business.

Hard disagree. It's low margin if you're doing it wrong.

Hank's Trucking exists. It's called FedEx Expedite, among many other expediting companies. You should check things out before your fingers type a check that facts can't cash.

[tonyedgecombe]

FedEx agrees, that's why it ended its relationship with Amazon.