Netflix to Increase Shipping Centers & Shuttles
During the Netflix conference call yesterday Reed Hastings mentioned the "trucking network" as a competitive advantage:
Our plan is to continue to make the best online service even better. We’ll be operating over 50 distribution centers by the end of this year. We will expand our trucking network to 50 additional central post offices. Together, this will extend our reach to over 100 mail entry points, providing over 95% of our subscribers with overnight delivery.
This is the first time they've talked publicly about the trucks that deliver the movies from distant post offices to the Netflix shipping centers. A Netflix spokesperson confirmed that the shuttle trucks pick up the movies at 2am and deliver them for the 3-4am shifts at the regional shipping centers.
I expect they run the trucks in the other direction also (from the distribution centers to distant post offices).
Posted by: Hunter McDaniel | January 25, 2007 at 02:30 PM
So once Netflix launches a true download rather than a streaming service, what happens to these Shipping Centers that they're spending money on now? Does the capital investment just go up in smoke?
Posted by: Edward R Murrow | January 25, 2007 at 06:22 PM
I suspect Netflix has a lot more capital tied up in the discs themselves than they do in the shipping centers. But in any case, the shipping centers have a long life ahead of them, IMHO.
Posted by: Hunter McDaniel | January 25, 2007 at 07:31 PM
This is great news! I am happy to see that i'll get my DVD's faster now
Posted by: getaloan | January 25, 2007 at 10:54 PM
Murrow, what type of capital investment do you think it takes to launch a shuttle and/or shipping center. But a van. Rent an empty warehouse, hire some temps.
We should all see through your usual nonsense. Just today you flame NFLX customer service and when asked about BBO, you say "Lastly, I haven't bought any gift subscriptions from BBO yet. I'm new to BBO since they implemented Total Access."
Yet on October 1, you talked about your Blockbuster membership:
"The cool thing about Blockbuster Online service and the coupons: if I'm in the mood for an action movie and I haven't been sent any action movies through the mail, I can take my in store coupon and 'impluse' rent at my neighborhood Blockbuster. Cooler yet, is that one time I was late in returning a movie that I rented with my coupon and I got an automated phone call telling me that I was in my grace period. I quickly returned the movie and was NOT charged a late fee."
How can that be? One of these appears to be less than truthful. Either October was a fabrication or your comment today about only being with them since TA (mid November).
Posted by: Blogger | January 26, 2007 at 02:09 AM
"During the Netflix conference call yesterday Reed Hastings mentioned the "trucking network" as a competitive advantage."
And here I thought that meant Reed was going to start driving new releases out to his customers directly....
Posted by: hawk5391 | January 26, 2007 at 12:26 PM
I'm pretty sure there's a Netflix center in Worcester, MA (outside Boston). When I started seeing envelopes marked "Manchester, NH" (Manchester is <70 miles from Worcester) I figured it was more likely they had some kid and a truck doing a circuit of post offices than that they had two centers so close to each other.
Presumably they'd be clever when sending out DVDs to use envelopes with a return address (associated with the shipping center) that's closest to the recipient.
All speculation on my part, of course.
Posted by: Nat Mishkin | January 26, 2007 at 12:37 PM
While visiting my in-laws near Hartford, CT recently I saw two Netflix envelopes - one with Worcester, MA as the return address, the other with Manchester NH. So either Netflix DOES have two distribution centers that close together, or they aren't very careful about choosing which return mailer to use.
Posted by: Hunter McDaniel | January 26, 2007 at 01:02 PM
Or since both DC are relatively close to Hartford, your in-laws are equally as likely to get movies from either location and the return envelopes are pre-printed with a return address for the DC that sent the disk. I'd love to have two DC close to my house since I'd assume you'd be less likely to get a disk from the other side of the country.
Posted by: priv8pete | January 26, 2007 at 02:22 PM
"Yet on October 1, you talked about your Blockbuster membership"
Hey Blogger, I wish my girlfriend would listen to me as carefully as you do!
I started my BBO 4 week trial sometime in Sep or Oct with the idea that I would cancel after the 4 weeks. Right around when my 4 week trial was going to expire, Total Access was rolled out so I figured I'd stay with it and see what it was like.
Since I need to watch how I spend my money and get the best value for my entertainment dollar, I downgraded my Netflix account and starting taking advantage of BBO+TA.
Regarding the customer service at Netflix, I don't think I flamed them, I just communicated my experience. In fact, I would be interested in hearing from other Netflix customers about their recent experiences with Netflix Support, especially during the holidays.
Why are people on this blog afraid of hearing opposing viewpoints? Let's all join hands and drink the Netflix Kool-Aid.
Posted by: Edward R Murrow | January 26, 2007 at 02:59 PM
FWIW I sometimes (rarely) get envelopes with a Hartford address. 99% say "Manchester". Go figure.
Posted by: Nat Mishkin | January 26, 2007 at 04:47 PM