The delivery industry depends upon shippers’ need to transport products and components from one geographical location to another. 3D-Printing technologies promise to eliminate much of that need. At highest risk are high-yield, cross-border shipments originating in Asia and other cheap labor markets.
The advance of 3D-Printing technologies presents a threat within the next 20 years to the viability of the delivery industry. Combined with the internet and Computer-Aided-Design software, 3D-Printing promises a future where most products are produced close to the point of consumption. As a result, manufacturing companies will no longer need to invest in offshore product development, and international shipping demand will dramatically decrease. eCommerce shipping volume will also suffer as sellers recognize the capability to transfer their product designs electronically for “printing” at a location near the consumer. To mitigate risk, industry leaders like UPS and FedEx need to incorporate the potential emergence of 3D-Printing into their strategic thinking. They need to partner with both shippers and 3D-Printing service providers to optimize 3D-Printing use and logistics. A possibility exists that the delivery industry will decide to incorporate 3D-Printing as a service supported at selected customer-facing locations. Any decision to do so should occur only after careful examination of the lessons learned from ZapMail, when FedEx decided that the best way to address the threat of facsimile transmission was to offer fax as a service. FedEx lost over $350 million dollars as a result due to competitive pricing and fax machines being sold to households.
To understand what 3D Printing could do to the global distribution network that supports manufacturing today, consider the production of Jim Kor’s Urbee 2, the world’s first 3D printed plastic car. An exceptionally light-weight, fuel-efficient, aerodynamic automobile with the resilience and safety of a racecar, the Urbee 2 (shown below) consists of 50 printed plastic parts, a motor, chassis, and safety cage.
Jim Kor in an Urbee 2 Plastic Car
Kor plans to drive the Urbee 2 coast-to-coast across the United States with ten dollars’ worth of gasoline. He also plans to submit the car to the strenuous safety tests imposed for racecars. All press to-date indicates that he and the Urbee 2 will succeed in both endeavors.
Significant advances in 3D Printing technologies and adoption must occur before the 3D Printing production model employed by Kor and others can become cost-effective, move into the mainstream, and present a threat to the current long-term strategies of global transportation service companies like UPS and FedEx. Mainstream 3D printers as a consumer technology may occur within the next five to ten years, according to Gartner. If 3D Printing hits the “Plateau of Productivity” as Gartner predicts, 3D printers will soon become as ubiquitous as today’s laser printers.
Manufacturers and distributors will also feel the effect of this operationally. As 3D printers become more cost efficient, heavy spending in capital expenditures will be required to get new 3D machinery and technology implemented. From a supply chain perspective, 3D printing will mainly affect freight shipping as raw materials (substrates) used for printing will be the only requirements for assembly. This will cause an increase in freight shipping worldwide and major transportation companies can capitalize on this if they have positioned themselves properly.
For more information on how 3-D printing might affect your supply chain and distribution operations, please contact Aaron Bresinger.