I clearly remember the younger ME in the late 1990ies when internet-sales started to become a thing:
At that time shipping (USPS, FedEx, et al) was fairly inexpensive. As sales took off, my gut feeling was: those shipping fees will come down in the next few years as volume will pick up heavily in internet sales - except: It didn’t - it seems to (subjectively) have gone up a great deal.
My comparison rationale: Flying (human travel) in the 80ies was darn expensive - now there are prices that are ridicularly low ($49 flights across europe,… ), which drove volume … P went down, Q went up, so to speak.
Why did that not happen with our generic internet-purchases? → Q went up, but P also went up …and by a huge margin, it seems (gut feeling: we now pay twice for shipping compared to 20 years ago.
I don’t know enough about FedEx to answer your question, but I know the answer to why plane fares got cheaper in the U.S. Fares used to be heavily regulated by the government. When they deregulated in 1978, airlines began competing on low prices, abandoning the amenities they had previously been able to offer. This is a rough business model: dozens of low-cost airlines have been started and failed since deregulation. Everything about transportation, especially fuel and labor, has increased exponentially.
Maybe a better comparison is the USPS. When FedEx was founded in 1971, a first class letter cost $0.08. Today it’s $0.78. I don’t think FedEx rates have gone up 1000%.
And, particularly after 9/11, even the major (non-discount) carriers (American, United, Delta, etc.) began to unbundle airfare (i.e., your ticket price) from amenities, as well as basic services related to your flight. Selecting a seat assignment, checking a bag, getting an in-flight snack, etc., are all separate purchases now.
They saw that the mass of air travelers (especially those traveling for personal or vacation reasons, rather than business) were picking airlines based on the lowest-priced ticket, so they separated that price-sensitive portion of their business from other services, which they then started selling to travelers a la carte once they had already chosen an airline.
And, the discount carriers (at least here in the U.S.) are not only no-frills, but generally are also nickel-and-diming their customers one way or another (baggage fees, early check-in and seat access, etc.)
Some companies negotiate flat rate shipping. Chewy is one example. They have a flat rate of $4.95, regardless of whether you’re ordering a cat toy or a 40 pound box of litter. Others charge full fare, which can cause me to cancel orders because the shipping can cost as much as the item.
That flat rate isn’t what the shipper is charging Chewy no matter how good a deal they have negotiated. For good or bad, shipping costs are baked into the price for the product.
Are you flying first class? Unless you are, or unless you have really high status level, when we’re talking about US airlines, there is no free booze, there is no free airport lounge, there is no free food, and if you have checked luggage, that’s not free, either.
If you’ve paid for a first-class ticket, I’d be very very surprised that it’s less expensive than sending a package.
If you have gotten all of those things “for free” because you have very high status with your airline, then it’s because you’ve spent a whole lot of money with that airline in the past.
Also, at least in the U.S.:
…you’re interacting with TSA staff at airport security, and those people and equipment are with the Department of Homeland Security (a federal agency), not employed/owned by the airlines.
Finally: show your math, please, if you want to get reasonable discussion and solid answers. Show cites for the cost of shipping that 23kg package, versus the cost of your putative round-trip flight. Otherwise, as far as the rest of us know, you’re just making a strawman argument.
How many 23kg boxes can fit into a cargo plane compared with the number of seats on that plane?
FedEx cargo planes:
The standard large wide-bodies like the Boeing 777F, which carries around 222,000-233,000 pounds (100+ tons), serving long-haul routes.
Commerical equivalents:
Boeing 777s typical layouts fall between 314-451 seats in multi-class setups
Assuming a more normal average of 200 lb for a passenger, a 451 seat plane contains 90,000 pounds of flesh, all of which require the services of attendants, food, air pressurization, entertainment, cable plugs and many other services in the air alone that cargo planes don’t. Plus a gigantic ground operation to deal with the vagaries of the flesh.
Not even apples and oranges. More like apples and bricks.
Why are you isolating airfare as the single cost of shipping. Let’s break this down a little.
You select the flight
You buy the ticket and either assign yourself a seat or pick one out during a cattle call
You pack your own luggage, and maybe you even pay a separate fee to fly it with you
You transport yourself (and your luggage) to the airport
You board the plane, find your seat and fasten yourself in.
At the end of the flight you take yourself off the plane, pick up your luggage, and arrange for delivery to your final destination.
What does the airline do? It takes you from one airport to another.
With a 23 kg package, someone has to pack it, load it on to a truck, take it to the airport, load it onto a plane, unload it on the other end, transport it to its destination and unpack it.
In other words, when you fly, you’re doing all the logistics yourself. When you ship a package, your paying dozens of people to handle the logistics at every stage. And those people don’t work for free.
And if flying as a passenger from the United States to Latin America is so much cheaper than sending a 23 kilogram package, why not just ask a friend to hand carry it?
No, I am flying economy in LATAM Airline (former: LAN-Chile) and fly on avg. once a year so no special status to speak of - LATAM is consistently elected (among) the best airline in Latin America and all that comes free with the economy ticket - on 8+ hour flights you even get 2 free hot meals, wine, booze .
A friend of mine was in this situation and he ultimately did “invite” a friend to handpick it up - and that is what triggered my curiosity.
while I see your arguments/reasoning, if you have ever flown multi-leg flights, with suitcase checked-through to the final destination, you also get dozen of people who handle your luggage between different planes, and they don’t work for free, either … yet ROUNDTRIP human travel (so doing this twice) is still cheaper than transporting a package one way.
Another reason why parcels SHOULD be way cheaper than human-air travel: Human travel happens in real time … NYC-Santiago: 12 hours or so … a package from NYS to SCL will still take 2-4 days (so by no means real-time), so lots of “options” to fill and load-balance flights, thus improving “utilization”. If a plane in human travel has a disperfect - the airline has to find hotel accomodation for 250 pax … if it happens to a package, their cost is sending an e-mail (instead of tomorrow, your package will arrive the day after)
I am really wondering where the (high) shipping fees could go:
a.) shipping companies get filthy rich: (doesnt ring true for the likes of FedEx, DHL, etc… are by no means a Meta/Google/Amazon)
b.) there are big inefficiencies in goods-transport by plane (could be, but I don’t get this impression - that stuff is about as automatized as can be, I don’t think there is lots of spare capacity, which might drive cost up)
c.) something else … (respecfully pinging @LSLGuy@Llama_Llogophile as there seems to be quite a bit of overlap - hopefully we get a more authorative perspective …
The cost may have scaled down, but that doesn’t mean the price (what they’re charging YOU) did. Price and cost are only vaguely and tenuosly related, and the primary thrust of that relationship is that price has to exceed cost in order for there to be profit, or at the very least, not loss.
So it’s entirely likely that as volume went up, the cost may have gone down somewhat due to economies of scale. But the price didn’t, which means that someone along that chain was pocketing the difference.
A way to think about is that if planes/trucks/ships weren’t full, the cost was what it was, but as volumes increased and those vehicles filled up, the cost would have gone down per unit (it costs nearly the same to drive a half full truck as it does a full truck), but they charge you the same and pocket the difference.
I don’t think I have anything helpful to add here, having never flown cargo. However, I have flown as a passenger on a cargo plane.
A few times when I was an airline pilot, I jumpseated on a major cargo carriers plane and it was an interesting experience. This company, which I won’t name but it rhymes with TEDx, was very nice about commuting pilots. It was very unlike jumpseating on a regular airline. They gave me a crew meal and I went out to the aircraft with the pilots. There were a few first-class type seats behind the cockpit and I sat there and watched as they loaded the hold. It took about 45 minutes to go from empty to full and it was obviously very well organized and choreographed operation. I mostly tried to just stay out of the way. This is only relevant to the current discussion insofar as I suppose we are paying for that sort of precision. This company is obviously very efficient at moving things around the world.
I’ve flown with a few former TEDx and YOUP-EE-ESS pilots and they are always excellent. Very high standards there and they make a very good living, which might also factor into overall costs.
Another thing; you’re talking about sending something overseas, so there are customs and other international costs involved that one might skip if you’re carrying the thing as a passenger. And of course if it contains lithium-ion batteries, that means special care.
They are if you’re flying internationally. Even when I flew between Houston and Quito on United last spring (an ~5 hour flight, no longer than some longer domestic flights in the US) I got a hot meal, alcohol, and free checked bags in economy. I did have to pay to access the lounge, but it was worth it given the long connection I had in Houston.
Passenger travel consists of many tiers of pricing, from first class to dozens of economy fares with different prices and restrictions for what’s essentially the same seat and amenity package. Most of us buy from the cheaper lower tiers.
Freight also has tiers of service and pricing. The service differences are about care in handling, hazardousness, and speed of end-to-end delivery. But the big shippers get the big discounts and ordinary people just trying to move one box one time pay the highest price. So we’re using rulers calibrated from the opposite end of the scale to measure the other service.
Airplanes are not good at heavy cargo. Ideally you’d fill both the volume and the weight capacity. Humans are the density of water, but need a lot of empty space around each of them, reducing the effective density of a load of passengers.
Mostly metal items in wooden crates are bad air freight while clothing or plastic enclosed in a thin plastic envelope is good air freight. FedEx started out in the 1970s charging $10 to move an envelope that USPS would move for about 40 cents. The speed (and tracking) was the attraction. Their service depended on each item being light & lowish density. Most consumer single-box shipping tends to the heavy side.
The cargo carriers also use something called “dimensional weight” where if your package is large & light, they charge more than if it’s small and the same light weight. So you’re screwed no matter what your own cargo’s density is.
Passenger service in most countries, domestic or international, has a large number of competing carriers which drive down prices. In countries which lack multiple competing carriers, prices are high.
Door to door freight service OTOH has very few competing carriers. Who are more able to maintain high prices, at least for the consumer tier of services. Is it collusion or coincidence? Yes to both. With little effective regulation because consumers aren’t the real customers they care about.
I buy a lot of drop-shipped Chinese crap. It’s notable that nearly none of it comes via FedEx or UPS from end to end. Instead brand X courier service delivers it from a warehouse to a Chinese airport, then one of a dozen cargo airlines carry it to a US gateway who then hand it off to one of a dozen no-name courier services, or the US postal service, for delivery the rest of the way to me. The US-based no-name courier services don’t have long-haul trucks or airplanes; they subcontract from somebody who does. All of that multi-vendor complexity is in the service of the seller paying less for shipping. They have the volume that gives them access to the sorts of freight travel agents (“freight forwarder” in the argot) who can assemble those cheap itineraries. When you or I walk into a package shipping retailer, we don’t.