Shyp’s Packages Ditch Addresses to Make Delivery Easier
Dealing with packages is a pain. It’s a pain to box up your items. It’s a pain to stand in line at the post office. And it’s a pain when you aren’t home to receive a package and the FedEx guy sticks one of those tagged notes on your front door. You know, the ones that send your heart sinking when you spot them while walking up the stoop.
In the year since it launched, San Francisco-based on-demand shipping company Shyp has worked hard to provide a solution to the first two things, but not the last one. Today, though, the company announced “address-free shipping,” with a new focus on the actual recipients of packages, and a new look that Shyp CEO Kevin Gibbon is calling the startup’s “single largest product update” to its apps since 2014.
“This is the first time that a shipment product or service has an actual relationship with the recipient,” Gibbon tells WIRED. “Traditionally, it’s just you at the post office, the address is outside of the box, and that’s it. What we’re doing is building the relationship and the flexibility for the actual recipient himself.”
Shyp’s announcement signals the intent of the company to move even deeper into one of Silicon Valley’s favorite problems: logistics. Of all the players in the space, Amazon is the obvious frontrunner, with its massive logistics network and an army of warehouse workers (both humans and robots). But Shyp, the David to Amazon’s Goliath, wants to give the world’s biggest retailer a run for its money—and this smart twist on package logistics seems to be one way it is trying to do so.
A New Focus on Recipients
The way it works is simple: Instead of shipping addresses, Shyp customers get usernames instead, and their addresses and delivery preferences are synced to those usernames. When a contact wants to use Shyp to send them something, he or she can just type in the username, rather than a street address. Senders don’t even see exactly where the package is going to—they don’t need to, Gibbon says. If the recipient hasn’t used Shyp before, they’re prompted with a message to sign up for the service. “There’s a built-in virality to the new service,” says Gibbon.
Afterwards, Shyp recipients can track the package inside Shyp’s smartphone app. In the window of time while the package is still being prepared, they can change where the package gets sent, too. Gibbon says you don’t need to be in one of Shyp’s active markets—San Francisco, New York (Brooklyn and Manhattan), Los Angeles, Miami and Chicago—to be a recipient. Anyone, wherever they are in the world, can receive a package via Shyp. It’s only senders that have to be living in one of Shyp’s five markets.
How is it able to manage all this? Shyp’s backend, which we’ve written about before, has remained largely the same. The company has invested in machines that can take raw cardboard and create custom-sized boxes. Beyond eliminating wasteful bubble wrap and paper stuffing, smaller boxes also tend to mean cheaper shipping prices. And in each of the cities Shyp operates, the company has set up intermediary “nodes”—strategically placed vans between couriers on the move in bikes and cars. When the van is full, it makes a trip to one of Shyp’s warehouses, where the packing and shipping happens.
Shyp claims a pickup window of 20 minutes from when you first snap a photo of the thing you want to ship. To get things where they need to go, the company employs 65 “core” workers at the moment, plus “hundreds” of couriers, satellite drivers, and warehouse technicians. In Chicago, Shyp’s latest market, the company has brought all its couriers onboard as official employees of the company—and it says it’s working to transition the rest of its couriers to become W-2 employees. Most of the couriers work as part-time employees, which doesn’t qualify them for health insurance. But Shyp pays for the workers’ payroll taxes and workers compensation, and doesn’t make them sign non-competes, in case they want to work for other on-demand services. According to Gibbon, transitioning its workforce into official employees gives the company a big advantage, since that qualifies them to go through formal training.
Gibbon also says that because the volume of packages coming in is so huge, the discounts Shyp gets from carriers such as FedEx and UPS make them profitable. The company is expanding consistently, Gibbon claims, at a rate of about 20 percent month over month. “We’ve become a predictable growth engine,” says Johnny Brackett, Shyp’s head of communications, adding that the company expects the upcoming holidays to be an even bigger season for Shyp.
The Future of Logistics
Shyp imagines a host of uses for address-free shipping. When an item needs to go back to a company, for instance, a Shyp sender can simply search the database for “@Apple” or “@Samsung.” And there are other uses, too. “If I left a pair of shoes at someone’s house, I can just have someone download Shyp and send it to @Johnny,” Brackett says.
Of course, this isn’t the end of Shyp’s big ambitions. The eight- to 10-year vision is for Shyp to become a global standard in shipping, Brackett says. And there are so many opportunities that the startup wants to eventually activate, like handling the “last mile” of shipping—that is, giving recipients even more options, like being able to redirect a package in, say, the final hour before it’s about to be delivered. Another area Shyp could optimize could be in the reduction of costs of misdeliveries—a cost that’s built into the current system, Gibbon says.
“Today we’re tackling the biggest friction points that we see in the market,” Gibbon says, “but we’ve got a longterm vision.”
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