E-commerce just gets bigger and bigger every year, and logistics have had to change to accommodate that. In this week's episode of Industry Focus: Energy, host Nick Sciple and Motley Fool contributor Dan Kline look at the complicated web of business logistics today.

Stores such as Walmart (WMT -0.52%) and Target (TGT 0.86%) are competing with Amazon.com (AMZN -0.32%) for a slice of the e-commerce pie, but their game plan has to stand out from the digital giant's. Meanwhile, massive impending tariff increases led retailers across the board to stock up on Chinese goods. But now, those tariff increases were delayed and might not come at all. Plus, UPS (UPS) and FedEx (FDX 0.37%) made some serious strides since last year, while an upcoming cost increase at USPS will affect consumers and businesses all over the country. Tune in to find out more.

A full transcript follows the video.

10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.* 

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018
The author(s) may have a position in any stocks mentioned.


This video was recorded on Dec. 13, 2018.

Nick Sciple: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. Today is Thursday, Dec. 13, and we're discussing logistics. I'm your host, Nick Sciple, and today I'm joined in studio by Motley Fool contributor Dan Kline. How are you doing, Dan? 

Dan Kline: Hey, Nick! Can't we do this at my house, where it's warm? [laughs] It's 32 degrees here in Alexandria, Virginia! It's 81 in West Palm Beach. 

Sciple: Tell me about it! You're coming down from West Palm Beach; I grew up in the South. Not ready for this weather. I'll tell you, it's not just that it's cold; we're getting up to 20 mile-per-hour gusts of winds up here. It's not only freezing cold; it's freezing cold, cut-through-your-jacket, make-you-miserable, miserable weather. I'm a little jealous of you getting to go back home to Florida. 

Kline: I have a guest room. There's a blow-up for Austin. We could totally work this out. [laughs] 

Sciple: Yeah, let's set it up! Let's get some mics down there and make it happen. Anyway, it's good to have you on, Dan!

Kline: Thank you for having me!

Sciple: We're following up on our show we did a couple of weeks ago on trucking and the shortages there. We're going to do a little bit of a follow-up on what we're seeing after this holiday season in those channels, and what it means for us going forward. 

First off the bat, Dan, I wanted to get your thoughts. Based on data we got released last Thursday, Dec. 6, the U.S. exported more oil than it imported for the first time ever in the last week of November. They exported 211,000 barrels per day. We don't have to go into investing here, but as a U.S. citizen, what does this mean? We're a net exporter of oil here in the United States now.

Kline: I'm a little older than you. I literally remember gasoline shortages. Now, I wasn't driving back then, but I remember the news stories. So this is stunning. On the other hand, we are coming very late to the party. We are now the masters of something that's, what, 10 years away from being somewhat irrelevant? We're rapidly getting rid of our need for oil and gasoline. 

Sciple: That's true. Over the next couple of decades, we're probably going to start to see demand start to roll off. It's remarkable, how we have these supplies, particularly in the shale industry that we didn't even know we could get to for the longest time. And now we're a net exporter. Just three years ago, President Obama back in 2015 lifted what had been a ban on oil exports going back to the '70s, as you mentioned, the oil crisis under the Carter administration. Just in those past three years, we've gone from it being illegal to export to being a net exporter of oil. It's a really interesting phenomenon going on. We'll have to see how that plays out over time. 

Kline: I think there is an investing takeaway -- look at research and development. If there are companies that are saying, "Hey, here's a resource that's trapped; we think we can get it out," that might be a good long-term play.

Sciple: That's exactly right. 

Let's pivot into our main topic for today, which is talking a little bit about what's going on in logistics, and putting that into context with what's going on with holiday sales. We're seeing store visits down about 1.7%, according to ShopperTrak data. Digital sales, however, were up 23.6% on Black Friday. Consumers spent more than $26.61 billion online between Nov. 21 and Nov. 26, according to Adobe Systems. How have retailers and logistics infrastructure absorbed this spike in demand for the holiday season, particularly online spending?

Kline: They've tried to flatten the season out. If you remember, it used to be Black Friday. That was the day. People lined up at stores. Then it became Thanksgiving. Now, starting Nov. 1, you were starting to see sales. So I wouldn't think that much about the store traffic being down. We don't have hard numbers, but sales were actually up. The people who went to stores were more likely to be buying a TV or a refrigerator or something you actually wanted to see.

In terms of online, they're trying to funnel you into certain items. If you look at Amazon, who breaks down some of what they sold, all of their top sellers, like nine of 10, were Amazon items. They know how many they have. They're pushing you to those. They're heavily discounting them to get you to make decisions. They're slimming down the merchandise that you can easily find on sale, so they have a lot of whatever it is you're buying. The days of shortages have gone away. Nobody's punching each other at a Walmart over a TV anymore -- well, not nobody, [laughs] but very few people are doing it. 

Sciple: You're right, Dan. We've seen some trends of spreading out promotions. In the past, it had been all front-loaded on Black Friday. Now, we're seeing online spending on the Wednesday before Thanksgiving was up 31%. It was up 28% on Thanksgiving itself. You compare that to what we think of as the big shopping day, Black Friday was only up 23.6%. Cyber Monday was only up about 20%. We're really seeing this nudge toward consumers, spreading out the holiday purchases so we're not getting everything front-loaded in one period the really stretched our infrastructure.

Kline: And some of it's purely mechanical. Amazon has, for the last few years, had 100 million Prime subscribers, people that could just hit a button and order. Walmart is sort of in the beginning stages. When they went to free shipping, a little over a year ago, I don't remember the exact date, that captured data for them. That was more people putting credit cards on file. Target offered free shipping through the holiday season. There are more digital retailers you can buy from easily. All three of those have my data. eBay has my data. Probably a number of specialty places.

The hesitation to shop online on the holidays was, "Well, I see it on my phone, but do I want to sit here and type in my credit card number, my address, all that?" Now, that's really become easy. Sometimes you can do it with Apple Pay and with other automated payment methods. And that's taken away one of the major barriers. People who used to use their phone as a shopping tool, as a catalog, are completing the sale now. And that's taking people out of stores, which is a good thing if you're in line at a store, not a great thing if you're waiting for something to be delivered via a truck. 

Sciple: Sure. It's like we talked about in the last show. It's just it's much more complicated to deliver dozens of shipments to individual homes than it is to deliver one big, massive shipment to one store.

Another trend we're seeing, we mentioned spreading out these promotions. We're also seeing a little bit of nudging toward these pick-up-in-store, delivery-from-store options. Again, Dan, that's what you were talking about, the same trend we were talking about. It's much easier to deliver a big chunk of goods to one place and then distribute from there than it is to do a thousand different individual one- or two-box shipments.

Kline: And let's call this a nascent technology, the pick-up-in-store. I live in two different places, so I'm in a number of different Walmarts and Targets. They've redone the Walmart and Target where we are in Davenport, Florida. When you walk in there, it's like a doctor's office. You enter your bar code, and it shows you your number. If you go to the one in West Palm Beach, which just has the pick-up tower, it's utter chaos. Nobody knows what's going on. Your item might not be there. I told you, we ordered something in store, that was physically in the store, and it took five days to get it. [laughs] I had to leave, obviously. I didn't stay there for five days. I had to go back and get it. These things are developing, and they're becoming more the norm. People are becoming more comfortable with them. But there were a lot of bumps in that process this year. 

Sciple: Yeah, it's something that's still developing. Like you mentioned before the show, we talked about how these traditional retailers, the Walmarts and the Targets of the world, have struggled a little bit more than some of the online-only retailers integrating this new omnichannel system. Maybe that's because, as we mentioned, they're used to this legacy regime of getting all their goods shipped to their store, and that supply chain mechanism. That transition has been a little bit of a bumpy ride. 

Kline: Putting a TV on a shelf is a lot easier than looking at the TV in the warehouse and going, "Well, Nick wants one. He's going to come in in a couple of hours. Dan wants one, but please bring it to his house. And these three other people probably will buy it off the shelf." It's more complicated now than it once was. 

I think you also have to look at, this is maybe year two of this being a technology of people using it at all. Amazon, in terms of its pure delivery model, is a few years ahead of where Walmart and Target are. There were growing pains this year. Anybody who's ordered has gotten weird boxes, orders that come early and late. You guys at the office sent me eight days of Hanukkah gifts spaced out over eight days, and four of them showed up on the same day. [laughs] So we're seeing some problems. But really, not as bad as I expected.

Sciple: You're right, Dan. Let's also talk about what's going on with these traditional logistics companies, FedEx and UPS. FedEx, UPS, and the Postal Service, actually, collectively have, in spite of this increased demand, logged near-best on-time delivery performance since 2013, according to Ship Matrix, which is a software provider that analyzes shipping data. UPS delivered 98.3% of its packages on time, while FedEx and USPS had on-time delivery rates of 98.9% and 97.9%, respectively. 

What we're looking at here, Dan, is that while there may be some struggles in these retailers from their omnichannel perspective, these traditional logistics folks have really done a good job absorbing this demand.

Kline: They learned their lesson. Last year, weather was more of a contributing factor. And we could still have storms that screw everything up. There's absolutely no way FedEx can plan for the storm we had this week in the Midwest. That's not expected. People are going to get some packages late. 

But last year, there were a number of problems. There were Amazon orders coming after Christmas. This year, they threw people at the problem. We were both talking about an article we saw in The Wall Street Journal earlier, that they're hiring tens of thousands of people even now. They weren't going to just take this and say, "Maybe we'll get it right." They threw a lot of money at it. That's probably expensive. It's probably going to hurt the margins for those companies. But from a reputation point of view, it is much better to get it right. 

Sciple: I also saw some interesting data from FedEx. They've been working closely with retailers to plan out demand. They've also even put some limits on how much individual retailers can put into their shipping network, to prevent them from becoming overstrained. That's a trend we're seeing, where these logistics providers and the retailers are having to work together to make sure all the goods get where they need to be when they're supposed to get there. 

Kline: I think it's also worth it to step back as consumers. If I send you a gift that you're really waiting for, and it's the only gift FedEx delivers incorrectly all year, you are going to have a negative perception of FedEx. This is not a zero-sum game; 98.3% is still going to come with a fair amount of negative feedback for these companies.

Sciple: In addition to these cooperations that we're seeing between FedEx, UPS, these traditional logistics providers, we mentioned spreading out promotions that some of these retailers have done. We've also seen some interesting maneuvers to open up new logistics capacity that maybe hadn't been used in the past. One of the examples that I've been reading about is, Amazon, on vacant patches of land that they have near their logistics centers, they have started running some of their operations out of large tents. I know we saw that with Tesla, with their factory. They had an additional assembly line out of a tent. Well, tents are hot in the streets right now. Amazon is doing them as well. What can you tell us about what these kinds of operations are adding from a logistical perspective?

Kline: I think it's very important, because Amazon is changing how these companies think. We've talked about some of my Walmart issues. Walmart has always had the "This is our process; follow our process." Amazon takes a "We're getting it to you in two days because that's what we promised." You talked about the tents. It's not just that they've set up added facilities. They're also bringing in temporary workforces. Basically, if they have to strap your package to a carrier pigeon to get it to you, they're open to that. And that's forcing Walmart and Target to take a little bit more of that attitude, of "OK, this isn't about our system. It isn't about what we're going to do next year. It's about, how do we get this package delivered? If our manager has to put it in the back seat of his car." And we've all seen people in our neighborhoods delivering Amazon packages that are barely identified as working for Amazon. A sticker on the window of the car, sometimes. Which is a little creepy. But but they've really taken the attitude that the result matters. 

I think, much like with Tesla, it was important to get the 5,000 cars number. Here, if you want consumers to have faith that this is going to work -- and Christmas gifts arriving on time is very, very important to people -- you have to be willing to do whatever it takes, even if you lose money on that delivery.

Sciple: Right. It's not only something that's coming around for the holiday season alone. JLL, a real estate firm based out of Chicago, they're converting a parking garage, it's over 3.8 million square feet in the middle of Chicago, underneath Millennium Park, into a logistics facility for retailers to use. We're seeing some conversion of properties in the middle of downtown New York City, these old, unused structures, and turning them into logistics vehicles.

We're really seeing a move, both in the short term, making things work over the holiday season, and then longer term, putting these logistical facilities as close to the customers as they can. So in the middle of Chicago, in the middle of New York. That's something we're going to continue to see developing. There's a little growing pain with the tents. 

What do you see long term, how these infrastructures are going to get built out to get everything as close to the customer as possible? 

Kline: I think they need to know their data more. Obviously, if you're Amazon, you can use Whole Foods; you can use some of the Kohl's they have relationships with. As they start to build the holiday data year after year after year, they, in theory, can have what you're going to buy closer to where you are. They can also build their flexible capacity relationships. Our Davenport house has a Walmart and an Amazon Fulfillment Center on the same road. Usually, when I drive down that road, I see 10, 12 Amazon Prime tractor-trailers, all with the Amazon logo. Now, you see, like 40, 50 tractor-trailers overnight, but most of them aren't Amazon anymore. So they're clearly flexing out their workspace and building relationships. 

Obviously, the price of trucking has gone up. They're paying dearly for that. That's going to hurt margins; it's going to raise prices. But as that happens, next year, they might realize, "Yes, we can fully add 15 more Amazon-branded trucks at a cheaper price, which will logistically work, and we'll need them at the holidays."

Sciple: Right. It's definitely going to be an interesting phenomenon to pay attention to going forward.

Dan, on the back half of the show, as I mentioned, we're going to talk a little about what's going on from a macro perspective affecting logistics and shipping. The first thing I want to talk about is tariffs. 

I know, it's a big issue. We've had several rounds of tariffs this year. The most recent news that we got was an agreement between President Trump and President Xi of China to declare a ceasefire in what has been an ongoing trade spat between the countries, which would delay increases on tariffs, which are currently 10% and were set to increase to 25% Jan. 1. It's going to delay that tariff increase for at least 90 days, to continue negotiations with that trade dispute.

We would have expected to see the trade deficit between the U.S. and China to shrink as a result of tariffs. Actually, we have seen it surge in a very significant way over the past few months. In October, it hit the highest it had ever been at $43.1 billion. Part of that has come because this expectation for tariffs to increase on January 1st to 25% has incentivized a lot of exporters in China and a lot of importers in the United States to front-load their shipments to beat that increase in tariffs. Now that we're not seeing that increase, what does that mean for U.S. retailers and for logistics providers across the world. 

Kline: It's a problem. You bought a lot of, I don't know, shovels. You bought a lot of shovels at $10 because you didn't want to pay $12 for them. Now, they might not cost $12, and you've tied up all that money in those shovels. Let's hope they sell. But what if you over-ordered? What if your stockpile doesn't match demand? You're going to have some dead inventory. You're going to have some inventory that maybe they make up a little bit because they sell it after the holiday season at a good price. But people hedged against uncertainty, and there's still a ton of uncertainty. 

Sciple: Yeah. We still don't know, when that 90 days comes around, that these aren't going to get jacked up again. Another factor to think about is that it wasn't just one retailer doing this. Large numbers of U.S. retailers, all looking to get their goods to market before this Jan. 1 increase, while there's only a limited supply of logistics infrastructure to make that happen. I'm sure they paid a little bit higher rates to make that stuff and get here that ended up not being necessary. 

Kline: When you run a smaller retailer -- as we've talked about, I ran a toy store that did a couple of million dollars in sales a year -- you have to make your Christmas decisions in the summer. You're staking out your inventory, your Legos, your stuff that's going to sell. This is not as big of a problem at Walmart or Target. Let's say I banked on "I'm going to buy a bunch of Han Solo Star Wars Legos for my toy store," and then the movie tanks. That's what's kind of happening here. Stores that don't normally have to make big bets in advance had to make big bets in advance. 

If those bets were right, it won't matter. It'll probably all even out, in terms of the pricing. But the reality is, that's not how it happens. If you're Walmart, you can make a relatively small bet for Walmart and then just order more. Instead, they're chock-full of stuff, and we will probably see a slowdown, a pretty big slowdown, in ordering in the first quarter. 

Sciple: Right. This inventory that we had built up is going to have to roll off before we can make meaningful new investments in inventory.

Kline: And without being too political, you can say 90 days, but I think we're at a time where every one of us in this space wakes up in the morning and checks the news to make sure nothing crazy happened. War with Canada, invaded Mexico, who knows? [laughs] That, as a buyer, as a national or global retail chain, that has to weigh very heavily on every decision you make right.

Sciple: Right. As you mentioned, businesses really don't like uncertainty. We see that in the stock market. As uncertainty rises, we see more volatility. And we see that in these logistics infrastructures. Just as an aside, this is not a problem that is unique to the United States. We're seeing a very similar problem in Britain ahead of Brexit. They've had a massive demand increase for storage facilities in anticipation of Brexit, disrupting a lot of the trading relationships in that region. We've seen retailers over there stockpile on inventory and stockpile on storage. It creates a difficult situation for businesses. 

Kline: You're getting a one-two punch here. You have all this inventory. You also have all the logistics and the increased trucking of the season. Moving all this stuff around is more expensive. It would be cheaper to order stuff for delivery Feb. 2 than to get it Dec. 2. So you're adding to the cost. And some items, you can price higher. Some items, consumers are only going to pay what they're willing to pay. If Amazon holds the line and paper towels are $3.99, you're not going to get $5.99 at Walmart for them. That's a terrible example. Nobody knows what paper towels cost. [laughs] 

Sciple: It's OK, Dan. What we want listeners to take away here from this tariff talk is, yes, it's great news that we're getting a delay in the increase of these tariffs. It's probably going to be good for consumers; they're not going to have to pay higher rates than they would have in the past. However, businesses took steps assuming that these things were going to be in place. They realized some expenses they did not have to to prepare for these circumstances. And the premium they paid for goods, to get them here quicker in anticipation of these tariffs, is extra money they're not going to get back. I heard some of our other podcasts talking about, when weather comes through and restaurants don't get sales. Those sales aren't going to come back. The same way, paying for these goods to get to market, you're not going to get that back in margin. It's something to think about in the context of tariffs and shipping in general.

Kline: As an investor, as you look at these companies, you really want to look at same-store sales and increase of sales. You're not going to look at cost of goods sold because it's an anomaly. We are not going to have this uncertainty forever. At some point, we're going to sort out the tariffs. Now, there's other instability. At times in the past, gas prices have created pricing instability. But this is a real wild card. You probably have to back out some of this expense when you look at the health of an actual company.

Sciple: I totally agree with you here, Dan. Let's talk about another wild card that's getting thrown in. Again, from the executive branch, there's currently a Treasury-led task force that is proposing the U.S. Postal Service should charge more for their package deliveries. The task force has reported that the Postal Service does not price its package deliveries in a way that focuses on profits, and therefore, the Postal Service should look at increasing their rates to more of a market-based rate. What's your instant reaction to this, Dan?

Kline: Doesn't that tell you everything that's wrong with government-run agencies? Like, can you imagine if I said, "Hey, Nick, I'm starting a business. It's a butcher shop. I'm not going to price the meat based on the cost of the meat. On Tuesday, veal chops are free." [laughs] It just makes no sense! I know there are laws; it's not easy for the Post Office to increase prices. But very clearly, any sensible person would say that whether it's Amazon or whoever it is, should be paying at least the cost of the service. 

Now, obviously, there are some deals. The Amazon delivery on Sunday through the USPS is profitable. They have negotiated a deal where, because they are serving one customer in a very specific way, it makes money. They need to figure out how to price the rest of their services. And that's going to change some things. If you raise the cost of shipping, it might be beneficial to go to a store. You'll see more of what Walmart does, where they will say, "We will sell this to you and ship it to you for this price. But if you come get it, it's that price." That's not something Amazon can do easily. But Amazon has the volume to negotiate things like their Sunday deal, or to say, "All right, you're going to raise prices? We're going to build our own shipping network."

Sciple: Right. To give a little context on Amazon, according to Morgan Stanley, Amazon relies on the Postal Service to deliver about 45% of its packages. That's a meaningful segment of their business. I know part of this Postal Service price discussion has been in relation to President Trump's attitudes toward Amazon. It's going to affect them. 

Another part of the industry that we might think is going to be affected is FedEx and UPS, in that it might actually be a little bit of a negative for them. Oftentimes, FedEx and UPS can use the Postal Service for their last-mile delivery. As those prices increase, that's of course going to hurt them, because it's going to increase the cost of their shipping. 

Kline: Also, though, higher USPS prices allows UPS and FedEx to charge more. 

Sciple: Oh, yeah. The analogy that I would have is, think about the federal funds rate. We've talked about interest rates being increased over time. That rate for banks is the baseline for interest rates. Their rates are always set relative to that number. Well, what happens in logistics as well is, UPS and FedEx and the other shippers' rates are set relative to the Postal Service. If you look at the Postal Service increasing their rates, it's just like the Fed increasing rates. All these shippers down the line get to increase their rates, as well, because relative to this baseline Postal Service rate, the spread remains the same.

Kline: Right. There's no magic to it. It's not like FedEx has a special better way to deliver packages. I mean, obviously, there's a heavy level of training at FedEx and UPS, and they're very efficient. But they haven't figured out teleportation or drone delivery or any of the things that would be a game-changer. So it's a fixed cost.

Sciple: Right. Going forward on these prices, it's unclear what form these price increases for the Postal Service are going to take. We do know at this time that there is going to be an increase on the USPS's Parcel Select service in the range between 9.3% and 12.3%, beginning at the beginning of 2019. For context for listeners, this service allows large shippers -- think your Walmarts and Targets of the world -- to sort their packages themselves and then deposit them directly to the USPS for their final delivery. We know for sure that large package shippers will see a 9%-12% increase in their rates for this service. What is your reaction to that? 

Kline: Do you buy from Amazon pretty regularly? 

Sciple: Yeah. As a U.S. citizen, I'm probably in the vast majority here as buying Amazon probably once a week.

Kline: I order from Amazon probably every day. And if Amazon came to me and said, "I'm going to increase the price of Prime by 12%," and everybody else I order from that sometimes I have to pay shipping said, "We're going to pass this on. We're going to raise your prices 15%," I wouldn't bat an eye. Maybe, occasionally, I'd pick up something in a store, just to not have to order it, to save time. But it wouldn't factor in. Unless Amazon said, "Prime's $129; now it's $650," I don't think this impacts anyone. This is one of those areas, like gas prices, where consumers just expect it's going to be a little flexible. I don't know, do you know what it costs to FedEx a box? If you have to FedEx something, you go to the FedEx and do it, and it costs what it costs.

Sciple: You're right. What could be the takeaway here is, given that this is a marginal increase, and there is a lot of consumer surplus to the Amazon Prime offering to begin with, this could be something that's just passed on to consumers. But it is something to think about. These businesses are going to have to adapt, whether it's passing those prices on to consumers or making changes to their logistics infrastructure, to handle these costs going forward.

Kline: We talked about this a little bit before. This is going to be a big benefit to brick-and-mortar retail chains that have very good supply-side logistics. You're going to be able to know on every item -- Walmart might be able to say, "I'll ship this to you if you also buy this." Amazon has the add-on items that are free shipping, but only with another order. I think you're going to see a much more sophisticated level. Or, Walmart saying, "I will give you something great. I'll give you a $5 gift card to come pick this up in the store, because it makes no sense to ship it to you because you're a mile away and I have to send it to a Post Office and it's going to be on a plane before it gets to you." So this might be a little bit of a blow to Amazon, or might force Amazon to make some more brick and mortar partnerships.

Sciple: Yeah. What we know for sure is that demand for e-commerce and goods purchased online is certain to increase over the coming years. And, as a result of that, the ability to move things from one place to another, particularly small, individual shipments, will become even more important each year. The companies that are able to navigate that dynamic and adapt as things change, whether it's with these tariffs or with the USPS, those are the companies that are going to really succeed going forward. Moving things from place to place is more important today than it maybe has ever been. What are your thoughts on that?

Kline: To close, there's one more prong of this that we've talked about before. That is, everybody is building out some sort of same-day-shipping capacity. My son texted me when I was with you at a football game yesterday. "How do you order from Chipotle?" My wife was baking, and he wanted Chipotle, so they couldn't go out. And I said, "It's Postmates." And my wife said, "What the hell is that?" She uses Grubhub; we have Instacart. So I had to send her a picture of the app and be like, "This is how you do it." Then I looked at my phone, and I have like 15 separate delivery apps, and like three restaurant chains we deliver from that you order through them, but maybe it shows up and it's Uber Eats, or maybe it's Postmates, or maybe it's who the heck knows. 

As Target and Walmart figure that out, they will take some stress off their two-day shipping by saying "No, it makes sense to have toothpaste and toilet paper and cookies be in our same-day delivery basket and to incentivize people there," because that's always going to be a smaller pool of items. There's less choice, they'll push you toward it. There are going to be huge shake outs there. There are not going to be 15 separate delivery services in West Palm Beach in two years. Maybe even Walmart and Target won't both make it. But that's going to change this whole UPS, FedEx. Those are all guys-in-a-car kind of delivery services. You will see this gig-economy service take some stress off.

Sciple: Yeah. It's going to be something that's remarkable to follow over the coming years as the face of retail continues to transition and consumer preferences continue to be, "I want to stay at home and you bring the stuff to me; you businesses figure out how to make that happen."

I'm excited to keep following with you, Dan! I'm happy to have you on!

Kline: I was going to say, I'll see you in a few weeks, we'll talk about it again. [laughs] 

Sciple: Exactly! Thanks again for coming on, Dan! As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against the stocks discussed, so don't buy or sell anything based solely on what you hear. Thanks to Austin Morgan for his work behind the glass. For Dan Kline, I'm Nick Sciple. Thanks for listening and Fool on!