Thought Leaders in E-Commerce: Devin Johnson, CEO of FirstMile (Part 4)

Devin Johnson: When we pull back to the answer to your question, when a call comes in and Amazon says, “If you sell this product, the category for shipping you’ve determines means that this package has to be delivered in three to five days.” One of our clients can send a request for us saying, “FirstMile, ship this with your expedited product.”

Within milliseconds, our technology looks at where it’s going from and where it’s going to and it makes the determination based on historical data, who can get that data in three to five days, and who can do it for the least amount of money. Our technology knows that based on a package going in this network, it needs this label and it’s going to cost this much. Over the course of the day, we’ll come pick up packages. It might be that those packages might end up in five or six different networks.

What’s important is they can manage it all through one tracking website. Their time-in-transit needs are hit based on the category of shipment that they want. We just take advantage of different delivery partners in those markets including ourselves. It took us a couple of years to build out that technology. We started doing those deliveries about six months ago. We now deliver thousands of packages a day in growing markets so that we can do things like same-day delivery. That’s one of the things that very few companies can do to scale. That’s something that we are doing now.

When we talk about Amazon, we know we cannot compete with Amazon around the country but I do know that if someone’s shipping a package on Amazon and it needs to be delivered today or tomorrow, there are very few companies that could do it as well as us. We operate on a much smaller scale, but we’re the best at what we do in those particular areas. Now the goal is to grow the areas in which we are the best at.

Sramana Mitra: What areas are you covering right now?

Devin Johnson: From a broad perspective, we have customers in over 40 states. We have our own trucks operating currently in six states which will be growing to ten by the end of this year. What that means is if you’re a company that’s in Phoenix, Denver, Southern California, Salt Lake, or New York, and you’re a FirstMile customer, you have an actual FirstMile branded truck and a FirstMile uniformed employee that shows up and picks up your parcels every day.

If you’re in one of the other 30 states that we support, we would have a contract driver come and pick up your parcels every day. That’s how that works. As those markets get more density and we become better at what we do, then we start going to that next level. We can put in our own vehicles.

Sramana Mitra: How do you view the trends of drones? Where do you see them being effective? What do you think is going to happen from a regulatory point of view? I can’t just imagine having hundreds of thousands of drones flying around continuously. What kind of a world do you envision given where you are in the food chain?

Devin Johnson: I think it’s unlikely or unrealistic that you would ever see them in largely populated areas or large cities. It could happen, but there’re just so many things that could go wrong from a theft or safety perspective. I think that that getting off the ground is somewhat unlikely in the near future but I also think that it’s ignorant to think that they don’t have an application. In fact, they already do.

I believe two years ago, DHL was performing deliveries with drones to remote areas where they needed to get medicine and other items into an area very quickly. I know that’s happening with more carriers in remote areas around the world. That will be life-changing for some of those communities. You will see some of that in a domestic setting in the United States. I don’t think you would see it in New York city anytime soon.

We have to be willing to accept it as a possibility. We have to entertain these alternative delivery methods if our buying habits are going to continue to increase and the standard is going to continue to evolve the way that it has. Getting a package in five to seven days was acceptable three or four years ago. Now if it takes more than two or three days, you’d think that someone has hired a turtle. It’s incredible to see the feedback we get from our customer’s customers. You have to evolve or die. You have to consider these alternative modes.

This segment is part 4 in the series : Thought Leaders in E-Commerce: Devin Johnson, CEO of FirstMile
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