Yesterday I had a chat with a colleague who's looking at transformative ways of reducing the cost of sending parcels to China. We came up with the following thought experiment, which was quite fun - I thought it was worth sharing. We started out with the assumption there is a fixed cost of cargo planes along the route from the UK to China and a very much lower cost of sorting a parcel, which varies based on the labour cost in the territory the plane lands in. The main determining factor on the cost per parcel is the utilisation ("degree of fullness") of the cargo space in any given plane, the secondary factor being the number of times it is sorted. A parcel takes a pre-determined route through the system, with a fixed number of interchanges, independent of the utilisation of the planes that carry the parcel at each stage. It occured to me that this is analagous to the switched telephone network; our thought experiment was to imagine that the international parcel post work...
Thoughts on strategy in a Digital Economy