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We're 15 days away from peak shopping season. Are you ready? (I'm not.)
If Alibaba's Singles Day on Monday is any indication, a lot of companies aren't ready--at least in terms of figuring out how to move so many products in a short amount of time. The e-commerce giant racked up more than $38 billion in sales on China's biggest sales holiday. Business Insider compiled a series of photos showing exactly what that looked like. Boxes and envelopes spilling out the backs of trucks. Workers overwhelmed by towering piles of packages. Warehouses literally overflowing with bubble-wrapped parcels.
If that's not a cautionary tale for retailers expecting big sales on Black Friday and Cyber Monday, I don't know what is. Last year, Black Friday and Cyber Monday retailers earned a record combined $14.1 billion in online sales. This year, that figure is expected to hit $16.9 billion.
The higher that number rises, the more of a burden shipping becomes. Thanks to Amazon, many consumers see free two-day shipping as the default--and that's expensive. Even Amazon is a known loss-leader here, spending a whopping $27.7 billion on shipping in 2018.
It's a perfect opening for an enterprising startup with a novel solution.
On Thursday, CNBC wrote about one such startup: Magway, a British company co-founded by a former Hyperloop engineer. Magway is aiming to build an underground network of tunnels in the U.K. that would reportedly be able to transport as many as 600 million packages per year.
Amazon itself could be exploring a similar concept in the U.S.--the company filed a patent for a "subterranean" delivery system back in 2016 but nothing official has been announced in the years since.
And to be clear, it's going to be a while before the U.K. sees any progress. Magway says its first tunnel is unlikely to be operational until at least 2022.
Maybe tunnels are the solution. Maybe they're not. But something needs to change, because those much-hyped drones that can carry 5-pound packages aren't exactly making a dent in the problem.