It was the day of Milly’s big soccer match when Amazon Prime Air (hypothetically) prevented a catastrophe.
Do note that Milly’s new Puma soccer shoes were packed in an Amazon cardboard box.
Our goal? To see how a cardboard economy is changing our lives.
The Cardboard Economy
We could say our story begins in 1995 when Jeff Bezos started sending books to us through a firm he called Amazon or in 1879 when Robert Gair figured out how to mass produce the cardboard box. Like love and marriage or the horse and carriage, online shopping needs cardboard boxes. And each one has impacted each of us.
Curious about how online shopping affected our neighborhoods, researchers from the Delaware Center for Transportation collected data about Newark, Delaware. When they looked at shoppers, they were surprised that people were doing the same amount of driving. Yes, they were placing orders at home that diminished store visits but also they went to malls to check out a possible purchase. And when at the mall, their orders cut the amount of items they bought online.
In addition, there were more trucks on the roads, roads that were not built for freight traffic. As a result, drivers on local roads experienced more delays from truck traffic and their roads needed more maintenance. Furthermore, with people driving as much as they had previously and extra delivery vehicles, online shopping did not decrease GHG emissions.
On the delivery side of the market we have a host of start-up delivery services and UPS and FEDEx accelerating their efficiency initiatives. However, while fast delivery eliminates store visits, the anecdotal evidence I discovered indicates a greater volume of smaller orders, more returns and more cardboard. Not mentioning drones, one analyst suggests labor markets will have fewer sales personnel and more delivery people.
Then we have the containerboard. Although industry growth sagged during the recent recession, now it is again picking up because of online shipping and orders from Asia’s emerging markets. Predictably, the incentive to increase efficiency has led to innovations like the boxondemand that constructs a precisely sized box for each order in the warehouse.
On the other hand, the downside is getting rid of all of that cardboard. Yes, we recycle but it is not quite that simple. In Washington D.C. where they purchased larger trash bins, consumers were increasingly discarding their Amazon boxes with the packing materials–some of which were not recyclable. As a result, the huge sorting machines where they wound up became less proficient and the Chinese firms buying our recycled paper and metals said, “No thanks.” With diminished demand, getting rid of our waste has begun to cost us money rather than generating revenue.
Our Bottom Line: Externalities
You can see that the list of details is endless. But we can conclude that the cardboard economy–a world where what we use comes to us in boxes–will impact our time, our roads, our air quality, our jobs and even how we think and plan. An economist would say that the cardboard economy is creating positive and negative externalities.