Winning First and Last Mile Delivery
- The first mile gap between the top 10% of retailers and everyone else
- Supply chains cooling down while problems are heating up
- Lessons learned from time at retail giants and supply chain startups
- The labor situation on the West Coast
- What opportunities lie ahead in the last mile supply chain space
Penny has a wide range of experience across retail supply chains, logistics providers and startups, including companies like FedEx, Walmart, and Amazon. She shares about the strengths and weaknesses across the different players in the supply chain industry, whether it's a large logistics service provider, or a hot new startup.
Penelope Shaw 00:04
I am still really excited about finding an economic model that can be repeatable and sustainable in the last mile, I think it is still very expensive piece of the supply chain. And no one has completely and totally cracked the code on making dense routes, sustainable routes and good unit economics around the last mile.
Brian Glick 00:40
Welcome to supply chain connections. I'm Brian Glick, founder and CEO of Chain.io, and on today's episode, we have Penny Register-Shaw. Penny has a wide range of experience across retail supply chains, logistics providers and startups, including companies like FedEx, Walmart, and Amazon. Today, we're going to talk about how there are different strengths and weaknesses across these different players in the industry, whether it's a large logistics service provider, or a hot new startup in the last model space. So we'll be comparing and contrasting those strengths and weaknesses and learning a lot about the industry as a whole. So without further ado, here's the episode.
Brian Glick 01:27
Hi, Penny, welcome to the show.
Penelope Shaw 01:29
Thank you very much for having me.
Brian Glick 01:31
Why don't we start with just maybe a little bit of your background and let everyone know your journey through the industry? Yeah, well,
Penelope Shaw 01:38
I usually start with my origin story, when I was in my 20s in Rhode Island, when the governor appointed me to the Rhode Island transit authority, and I was the chairman before I was 30 years old, and not at all suited for the job. So I put in a lot of extra effort, learning about density and routing and being on time places in the movement of people. And from there, I just began my journey, went to FedEx, and was there for almost 20 years in a variety of roles. And since then, I have intentionally targeted working for large companies like Amazon and Walmart, and startups and medium sized companies in a variety of roles so that I could really know the industry from every angle. And I'd say that I've achieved that.
Brian Glick 02:42
To contrast those for me a little bit, what are some of the, you know, I think there are people on different sides of what they may even see as a conflict, the startups versus established companies. And you know, you get a lot of extreme positions online of "Oh, this is better, that's better", but I know the answer is always a little bit in the middle. So kind of what are some of the things you've enjoyed in the bigger companies and things that you love about the startups?
Penelope Shaw 03:07
Yeah, at a large company, I think what helps me thrive the most is the support infrastructure that comes along with it. You don't necessarily have to be your own recruiter, your own HR representative, you don't have to worry about the payroll taxes being right, you know, those things are long ago established, so that's one less thing that takes up, you know, your mind space for the week. I also like the fact that the guardrails of what the products are, and the services are fairly well established, and once those guardrails are up, that gives me the field in which that I'm playing. So if that makes sense, and I can be free within that field. What I like about startups is I consider myself to be a utility player. And I like going from one skill set and one function to the other. So one day, I might be thinking about security, the next day compliance, the next day, operational efficiencies and improvements, and I do like that, because I certainly don't get bored. There's no "rinse, wash, repeat" in a startup world.
Brian Glick 04:44
Well, I think one of the nice things about supply chain is there's very rarely a "rinse, wash, repeat" in general, right. I always say that. I haven't had the same day twice in my 25 years doing this so that's fun.
Penelope Shaw 04:58
Yes, yes. So what is the Aldous Huxley book? It's a brave new world every day.
Brian Glick 05:07
Take me back to my ninth grade English class. Exactly. So you talked about being a utility player. And you know, certainly, as I've gone on this journey, I've learned more about things like state tax filings in GDPR, compliance, and all sorts of things that you just don't think about when you just want to go build some supply chain software and help people. One of the things that I know you have some thoughts on is when you have to learn a new space is kind of that long journey to actually being an expert in something and kind of one of the challenges that can get startups is, we don't always have the time to kind of truly get to that journey to excellence, but kind of what are your thoughts on how long it takes to get to being great at things?
Penelope Shaw 05:53
Yeah, I absolutely think that you can get the foundational knowledge fairly quickly. But going from that foundational knowledge, which in learning theory is called the pinnacle of stupidity, I think is what it's called, you then go into a deep valley, and a long, hard climb up to expertise. And I, you know, this is going to be overly and falsely precise. But I think at least eight years, that's when I feel like having watched people do this for a couple of decades now, eight years is when people really come into their own, they have history to call upon, but also very good instincts about what might happen next. And they're also smart enough to know what they don't know. So they go looking for the knowledge that fills the gap. So eight to 15 years in the business, again, very falsely precise that.
Brian Glick 07:10
And so one of the things that actually I've been challenged with is, or challenges that I've had in our business is, you know, through the pandemic, and the job market and kind of working with what I will say, a staff younger than me, at least this idea that people want to be promoted or change jobs very, very quickly. Yes, you know, and I probably come from sort of a middle point generation have, you know, having the expectation of two to three years to kind of get good at something. And now it seems like, you know, it's more like a year that people expect, and then I want to do something else, which is really against what you just said, right? You haven't even learned that you're bad at it yet. But I'm wondering if you have like, had conversations with people or you know, any kind of way that you would think about expressing that to people, you know, who maybe are frustrated if their boss is saying, Hey, you're not quite ready for your next big?
Penelope Shaw 08:15
Yeah, well, I try to partner with those people and reveal what more there is to learn. That's not always successful. But I also have had to change my approach to things when I got out of law school long ago, everyone recruited you with the words of you'll be here 35 years, if anyone came in and tried to recruit with that mantra today, people would go running for the hills. But it was considered to be a very comforting and assuring kind of thing back when I graduated from law school, I think you have to show people that this industry is a marathon, not a sprint. There are lots of things that you think you know, but you really don't know. And I'm saying these things, and I'm hearing myself being way too paternalistic or paternalistic to have any effect. But you know, people will either get that message or not at the time, and if they get it, they'll stick around and learn more. And if they don't, they will be off to the next thing. And you say a year and my experience has been six months. You know, I'm impatient.
Brian Glick 09:46
Yeah. I was hoping to get a year out of some people sometimes. Kind of bringing us back to supply chain for a second. You know, you've had the opportunity to work with companies in sort of the first, middle and last mile? And, you know, I know that the last mile gets a lot of press lately, the last few years, e-comm and all of that, you know, but where do you see some of the big opportunities? What has you excited out there?
Penelope Shaw 10:19
Yeah, I am still really excited about finding an economic model that can be repeatable and sustainable in the last mile, I think it is still very expensive piece of the supply chain, and no one has completely and totally cracked the code on making dense routes, sustainable routes and good unit economics around the last mile. In the middle mile, I would say that, there's going to be some, what's the word, I'm searching for some combinations around in the market so that there aren't 40,000 competitors out there, trying to all ride the same poor infrastructure in the United States. In the middle mile, what I'm most passionate about is trying to get the roads and bridges of this country. in better shape, you go to other countries who probably started building their infrastructure, you know, post the 60s 70s. And it's so much more efficient, it's so much more thoughtful. So I'd like to see the United States concentrate on that, and then move forward in the middle mile. The first mile was where I played for the longest time at FedEx, and finding better ways to get things out of airports and ocean ports and pre file the information that will allow customs to clear before the plane or the ship arrives, having the right security, I'll always fall back to security and safety issues in the first mile. Those are places where I think there's still room for improvement, lots of room for improvement,
Brian Glick 12:27
I'm passionate about the first mile, I spent most of my career kind of in basically order through customs clearance, then there was this amazing world called dredge that we just didn't know what that was. But somehow things got out of the port and got to work to be and then we saw them in the stores. But no, I think that there's a lot of companies and this goes back to your experience, you know, from a Walmart or an Amazon versus what you see in the startup world is I didn't understand when I started Chain.io, how far the first mile gap was between, say, the top 10% of retailers and everyone else on the planet as far as sophistication, their ability to issue a purchase order and track it and have peace level visibility and leverage free trade agreements and, you know, effectively have this entire thing mapped out. And then you hit a wall at, you know, importers who do less than 30,000 shipments a year, which is 99.9% of importers, if they're lucky, they have taken all those emails that they have and put them in a spreadsheet. Right? Has that been your experience as well, that there's just this huge gulf?
Penelope Shaw 13:41
Yes. And even when I was working at a large freight forwarder that FedEx had created, even some of the very large players would just throw up their hands at some point and say, take care of all my importing for me from origin to clearance and let me know when it's finished.
Brian Glick 14:09
You're not saying that there are major retail brands who may not have their supply chains completely organised? That will be sacrilege, if that's what you're saying.
Penelope Shaw 14:20
No. That's not what I'm saying, of course. I'm just saying there's room for attention to detail. Maybe that's the nice way to put it. The nice Southern way to say it.
Brian Glick 14:31
You know, I'll just say kind of, again, from my personal experience that you know, I think when I first encountered a lot of the latest generation of tech companies that are addressing in first mile but also middle and last mile, E comm delivery is different, but in those other two areas. I was very dismissive of a lot of the tech out there as being useless because I I had come from places where we were on the other side of that gulf, we were on the more advanced side, right? And people would say, Okay, I have this, you know, order management platform like, yeah, but it doesn't deal with the fact that you might have a multi source product. I literally said this in an email this morning, somebody like, what happens if 20% of the products is subject to the Korean free trade agreement? And the other 80% is sourcing somebody else? And how do you do your blended landing cost? And they're like, we're just trying to move T shirts here. Right? Like, you know, this built in bias that I think a lot of us people who have been in these really complicated things, miss opportunities that some of the newcomers understand that they don't have to solve for those problems? There's an addressable market that doesn't leverage free trade agreements, for example, right?
Penelope Shaw 15:52
I'd say that's true. But perhaps the compliance part of me will still kind of seize up when I see that these solutions aren't addressing the other gaps. And what I have always tried to do in my career, and I'll borrow from the Amazon leadership principles to express it, is look around the corner and anticipate what's coming, and try to avoid the loss of management and leadership time that comes along with having to solve an administrative or compliance or litigious issue. I'd rather just have it never come up, rather than say, "oh, we'll get to that five years from now." That's just the way I'm wired.
Brian Glick 16:53
I think we come from the same place. So the number of customers that I had on when I was again, on the customer side, you know, they'd say, "oh, we're not going to invest in this solution" for $100,000. You say? Well, when you get your $10 million penalty you certainly will wish you had invested the $100,000, then, and then they'd pay us a million dollars to get them out of the $10 million penalty that they could have not had in the first place. So yeah, it's a speech I've given a lot of times.
Penelope Shaw 17:27
Yes, and, you know, paying a million dollars to get out of the $10 million penalty, sometimes that's not possible. Sometimes they want to strike agency does not have the ability, the authority to negotiate down. And that is also a foreign concept to some people that "oh, what do you mean, I can't propose a win win situation settlement kind of thing here."
Brian Glick 17:56
Yeah. One of the things you said to me a couple of weeks ago, that kind of stuck with me was that supply chain in general is cooling down as a topic while the problems are heating up. Kind of talk a little bit about what you meant by that.
Penelope Shaw 18:12
Yeah. So during the pandemic, for the first time in my career, my husband and daughter actually understood what I did for a living. And they were reading articles about supply chain and bottlenecks and new solutions, and they kind of got it. And when the world started opening up, again, those articles dried up, that attention to the supply chain has largely dried up. But I regret that because with inflation with a possible recession, with an over perhaps investment during the pandemic, in some areas, there needs to be thoughtful reapportionment of resources around supply chain, and it's not sexy right now, again, there was this one brief shining moment where it was kind of sexy, and now it's not as exciting anymore.
Brian Glick 19:24
Well, as we're recording this, there's, you know, rumblings going on on the West Coast about the labour situation may be finally coming to a head, which would certainly make it sexy again, unfortunately, right. So that is the part that's a shame. It's kind of like what you were saying about, you know, the building the bridges and the roads is you tend to get the funding when the bridge collapses. And it's in the news, right.
Penelope Shaw 19:49
So yeah, and Tibet, to the point of anticipating how about we improve the poor operate Patients before there's some catastrophic event. That's so much less fun, though. Yeah, that actually goes back to an old management lesson that I learned a long time ago, which was not to employ arsonist firefighters.
Brian Glick 20:17
Okay, right. There are lots of people who love to put out fires in companies and in supply chains and, and all sorts of things. And if they get bored, they light the fire so that they have a fire to put out. This was a big thing when we ran data centres was you would have engineers, administrators who would always be trying to do something new and innovative. And part of it was that stuff always broke. And then they had fun things to work on to fix. Yeah. And say, you know, I'm just trying to run a warehouse here. Let's tone down on the excitement a little bit and get some foundational things done, right?
Penelope Shaw 20:50
Yes. So probably the first deal I ever did as a baby attorney at the end of it. Someone said, You are unflappable. I took that as a compliment. In retrospect, I'm not sure it was, I think they met get more passionate about my deal. But I feel like if it's Code Red all the time, every day, you're not really ready when it is code red.
Brian Glick 21:24
I agree with you entirely. I think that, you know, especially now running software infrastructure company, right? We regularly talk about how boring is good, right? And boring means data's moving, boring means containers are moving boring means, you know, we all get to go home at the end of the day. Right? Those are good things.
Penelope Shaw 21:50
Brian Glick 21:51
So what else are you excited about? What's kind of like the next thing that you're you're getting all pumped up about?
Penelope Shaw 21:58
Yeah, well, I mentioned that I think the winners and losers are gonna start emerging here over the next 2,3,5 years. And I think that will be very interesting to watch, but also, I hope, participate with one of the winners as they emerge. So I'm excited about that. I continue to have and have never lost the idealistic part of me where I believe that what we do provides access to people who might not have access to goods and services. Otherwise, if we didn't show up and do our jobs every day. And that is kind of, you know, creating a middle class, maybe that's what that's about, a new middle class, not just the United States, but globally. So those are my idealistic things. And then I am super excited about EV's and AV's and the infrastructure that supports them and reducing the carbon footprint by 53%, which I think requires two out of every three vehicles that are put on the road in any class over the next 10 years to be electric.
Brian Glick 23:38
Yeah, I think that's a really admirable goal. I hope we can get there.
Penelope Shaw 23:43
I hope we can get there too.
Brian Glick 23:47
So if people want to get in touch with you, want to reach out on a thought, they kind of engage in these conversations more, what's the best way to find you?
Penelope Shaw 23:54
Yeah, well, I'm super available. And my email address is a long one. We'll put it in the show notes. But you can email me you can text me, you can contact me on LinkedIn. I love talking to smart people. I learned during the pandemic, that I am a very social person, I always thought I was an introvert and got my energy by going into a study and reading a book and meditating but no, I actually get my energy from engaging with other smart people. So I'd love to talk to your audience in any way.
Brian Glick 24:37
You know, it's funny, I can so relate to that. I always sort of pictured myself very differently than what I found out that I was right. You know, spent this entire past week out visiting customers and if you had told my 24, 25 year old self, that that was going to be my favourite part of my job, versus the sitting in a room and looking at a spread cheater a piece of code and I said you were crazy. So it's nice to find a kindred spirit.
Penelope Shaw 25:04
Yeah. And I feel like we're kindred spirits on a lot of things. I think we've been thinking about the same issues for a considerable amount of time. And I always find talking to you very enjoyable.
Brian Glick 25:19
If we continue down this line of conversation, I'm going to lose my reputation as northeasterners. So this might be a good time for us to wrap up. So thank you so much for being on the show.
Penelope Shaw 25:30
Despite the accent I think we've shared in the past that I spent a great deal of my childhood in Boston. So I certainly will lose my reputation as being the New Englander.
Brian Glick 25:44
Let's stop being nice to each other, then the hell we'll do it. We'll wrap up on that we'll both keep our reputations intact. So thanks again for being on the show.
Penelope Shaw 25:55
Brian Glick 26:02
Thank you so much Penny for that wonderful episode. Be sure to check out all the links in the show notes. And if you're in Germany during the month of June, make sure to come visit us at Transport Logistic, and check out the Chain.io blog @Chain.io. We have lots of new content out there. It's always a good read. So I will talk to you next time. I'm Brian Glick, founder and CEO of Chain io.