The Potential Impact of 3D Printing on Postal Operators
3D printing is changing the world in ways that demand the attention of postal operators and anyone else who works in or adjacent to the logistics industry. In July 2014, the U.S. Postal Service Office of Inspector General issued a white paper detailing how widespread adoption of 3D printing could lead to a major increase in commercial package shipments for the U.S. Postal Service. However, recent research has shown that 3D printing’s impact on the Postal Service goes well beyond just more packages shipped, as it promises to reshape today’s supply chains and transform entire industries.
It appears that mainstream in-home 3D printing could still be a decade away. However, recent research also suggests that business adoption of 3D printing is having far greater impact on the global economy than previously imagined. Improvements in evolving 3D printing technology have accelerated its adoption in critical industries, across both new sectors and those that have been using 3D printing for years to revolutionize their processes. In addition, many retailers have entered the 3D printing market, which speaks to increasing demand. Consumers can now buy finished 3D printed goods from multiple providers and have them delivered without needing to purchase their own printer.
Experts say that the largest disruptions from 3D printing will fall on the logistics industry, which is very important to the Postal Service. In fact, 3D printing could disrupt more than a third of global air cargo or ocean container shipments, as well as a quarter of the freight trucking business. This would fuel a shift in shipping demand from long-distance transportation to last-mile delivery, with products printed locally instead of requiring assembly from parts coming from all corners of the world. These changes could catalyze the trend toward reshoring American manufacturing jobs that went overseas decades ago. In addition, warehouses will convert to digital inventories with on-demand printing, resulting in much less need for thousands of spare parts that might sit on shelves for years. On top of that, small retail spaces will convert to showrooms for products that can be fully customized for each consumer.
Simply put, 3D printing will fundamentally change where and when products will be produced, stored, and ultimately delivered. Supply chains will collapse in distance and time as manufacturing is performed as quickly and as close to the point of consumption as possible. More consumers may come to expect same-day delivery, possibly even early morning and late evening delivery. There will be heightened activity in the last mile from localized production, so speed on that final track will be essential. In such an environment, the location and size of delivery base stations will also be critical.
Other organizations involved in logistics and delivery are taking note of 3D printing’s possibilities and the vast changes it will bring about. For example, UPS recently partnered with the company CloudDDM to open a 3D printing mini-factory at its World Port facility in Louisville, KY. The facility has 100 industrial printers running day and night to produce high-quality parts for corporate customers. UPS also offers 3D printing services inside many of its retail locations, geared toward supporting local businesses. In addition, a growing number of foreign posts are exploring the potential of 3D printing and related technologies. France’s La Poste, for example, offers a range of services, including 3D printers inside post offices, 3D printed jewelry based on children’s artwork, and fully customized packaging cut to the exact shape of delicate objects to offer protection during shipping. Additionally, the U.S. government is diving into 3D printing across a wide range of agencies, including NASA, the Department of Defense, and the National Institutes of Health.
Because 3D printing technology is fundamentally changing the logistics industry, now is the time for the Postal Service to associate itself with 3D printing in the minds of the public. The Postal Service should observe, learn, and examine the potential of 3D printing to the extent allowable under its existing authority. The examples of La Poste, UPS, and others show that there may be demand for printing services inside post offices. The Postal Service also could partner with 3D printing companies, provide 3D printing materials and support services for local small businesses, or serve as a community maker space. In addition, it could establish a reverse logistics service to handle recycling and processing of 3D printed goods, so that materials can be reused for future printing.
Waiting for a full-blown consumer 3D printing revolution could mean missing the multitude of ways that businesses are already embracing the technology and changing the world. Thanks to 3D printing, the supply chains of the future will little resemble the world we know today. Organizations might be ill equipped to work with tomorrow’s supply chains without fully understanding the implications of 3D printing right now.
At a basic level, 3D printing takes digital representations of objects and creates them in physical form by building up multiple layers of plastics, metals, powders, liquid resins, and other materials. People often refer to 3D printing as additive manufacturing to contrast it with traditional “subtractive” manufacturing techniques, which involve cutting, milling, or otherwise removing material to create an object. A major part of 3D printing’s appeal is that it allows for an unprecedented degree of rapid prototyping and mass customization.
While media coverage of 3D printing has often focused on cheap plastic 3D printed goods — such as smartphone cases, figurines with people’s faces scanned onto them, and other customized knickknacks — some of the most important advances in 3D printing are taking place in business applications. Manufacturers have used it for decades to do rapid prototyping of new products. More recently, 3D printing has been employed for uses as varied as revolutionary prosthetic limbs, aircraft jet engine parts that weigh significantly less and have fewer components than previous parts, and even simple houses. In fact, 3D printing has already fundamentally changed some industries. For example, a recent Harvard Business Review article reported that it took only 500 days for all hearing aid manufacturers in the United States to make the switch to 3D printing-based fabrication.
Taken as a whole, 3D printing is transforming manufacturing and reconfiguring supply chains not only within the United States, but around the world. It is changing the way consumers get the products they need and shifting power to individuals with unique preferences. Postal operators and nearly every organization that works in shipping, delivery, or other aspects of logistics should keep a very close eye on it.
OIG Research on 3D Printing and the Postal Service
The OIG’s 2014 white paper, If It Prints, It Ships: 3D Printing and the Postal Service, explained how 3D printing works and examined its potential impact on the Postal Service. Namely, the technology could lead to increased volume in the kind of small, lightweight package shipments that the Postal Service excels at delivering. Its ubiquitous physical network and excellent last-mile delivery service position the Postal Service to benefit more from 3D printing than other delivery companies will.
The Postal Service has an unmatched last-mile delivery network — no other organization covers as much territory as frequently and regularly as the Postal Service. It is often not cost effective for private delivery firms to make separate stops to deliver small, relatively inexpensive packages, particularly in rural areas. However, the Postal Service visits these locations nearly every day. Accordingly, other delivery firms often use the Postal Service for final delivery of many packages: the Postal Service delivers nearly two-thirds of lightweight, commercial packages to their final destination. This natural advantage in delivering lightweight packages is critical to benefiting from the growth of 3D printing given that the majority of 3D printed consumer goods are relatively lightweight. In addition, the Postal Service has begun introducing new Small Parcel Sorting System (SPSS) machines at plants across the country, which are intended to help it to quickly process many small packages.
Discussion Forum on 3D Printing and Postal Organizations
In August 2014, the OIG held a discussion forum to further explore how 3D printing could affect postal organizations. The forum included presentations by international experts on 3D printing, logistics, and other key areas. The discussion covered a range of topics, including the future market for 3D printing, consumer preferences related to 3D printing, the effects of 3D printing on supply chains and logistics, establishing community maker spaces through 3D printing, and other issues.
Participants at the forum discussed some of the major implications of 3D printing for postal organizations and logistics operators. Our subsequent research into recent developments in 3D printing supports the following findings:
Businesses that offer 3D printing sometimes face challenges with getting products in consumers’ hands quickly for multiple reasons. When print jobs fail due to problems with the design or materials, it can add a day or more to the interim between when a customer places an order and when the product is delivered. In addition, it is often difficult or impossible to anticipate demand when so many 3D printed goods are customized for individual consumers. When modern consumers expect very fast shipping, even short delays can have a negative impact on their experiences ordering 3D printed goods.
3D printing promises to reshape traditional supply chains. 3D printing will likely bring production closer to consumption, which could lead to dramatic increases in local shipping. This could also lead to less need for redundant physical inventories in large warehouses. As items such as spare parts can be printed on demand, the nature of inventory will transform from physical to digital.
The Changing 3D Printing Marketplace
The 3D printing industry is rapidly changing. While manufacturers have been using 3D printing for rapid prototyping for decades, it has recently caught a great deal of attention as a means of producing innovative goods. Widespread consumer adoption might still be years or even a decade away, but there are clear signs of strong current growth in businesses’ use of 3D printing and of its impact on delivery and logistics markets.
3D Printing Technology Is Improving
Although many people talk about 3D printing as one technology, the field actually encompasses several. The most familiar — and the one most often found in consumer 3D printers — is material extrusion, which uses a heated nozzle to dispense materials like plastics to slowly build an object in fine layers. Other 3D printing technologies use different techniques, such as fusing powdered substances with a liquid bonding agent or heat, laminating sheets of materials together, or using lasers to selectively harden liquid resins.
The company Carbon3D claims that its new 3D printing technology called Continuous Liquid Interface Production (CLIP) can print objects up to 100 times more quickly than previous technologies. CLIP uses ultraviolet light to harden a pool of liquid resin, with the solidified object rising up throughout the process. It remains to be seen how widely this technology will be used, or if other new technologies make 3D printing even faster. However, some experts speculate that mass adoption of 3D printing could take off if new technologies make the process significantly faster and capable of producing stronger objects. For industrial uses of 3D printing, variations in printers, quality or source of printing materials, and manufacturing practices can affect the consistency and quality of the functional parts being produced. Such challenges will need to be addressed before 3D printing reaches its full potential.
The 3D Printing Market Is Expanding Quickly
One sign of this growth is the recent surge in the number of major retailers that have started selling 3D printers, products, or printing services, including Staples, Home Depot, Walmart, Best Buy, Amazon, and Target. Merchants such as these may be entering this space because 3D printing addresses two critical trends in retail which are consumers expectations of stock availability and the desire for personalized and customized products.
Despite strong growth in the 3D printing market overall, experts estimate that mainstream consumer adoption of 3D printing is still 5 to 10 years away. One possible reason: many of the things that today’s affordable consumer 3D printers can make, such as toys or small trinkets, are the kinds of things consumers can already purchase cheaply and easily at stores or online. Moreover, the printers themselves may still be too expensive for most people, especially when compared to the costs of traditional “2D” ink printers. Consumer 3D printers can be complex, slow, and unwieldy to use. Analysts expect demand to increase as consumer-grade 3D printers become faster, cheaper, more capable of printing high-quality objects, and easier to use — including more user-friendly and accessible design software.
Even though mainstream consumer adoption of 3D printing may still be years away, many businesses and industries have already adopted 3D printing to revolutionize their products and processes. It has become a vital tool for advanced manufacturing, as important goods such as industrial parts can be produced with geometries that have not been possible with traditional methods. Additionally, 3D printing is now cost-competitive with traditional manufacturing for small production runs and production of single, customized units. Such factors are having a dramatic effect on industries adjacent to manufacturers, and, as the following section discusses, this is especially the case for the logistics industry.
3D Printing Will Disrupt the Logistics Industry
The logistics industry is likely to experience some of the biggest changes resulting from 3D printing. For example, 3D printing may cause some manufacturing to move back to the United States. In addition, warehouses will shift from physical to digital, as the designs of spare parts are stored in vast libraries for future on-demand printing. Moreover, some retailers may convert to shop windows for manufacturers with custom printing as each item is ordered, keeping only a model in stock.
Moving Production Closer to Consumption
Some of the biggest changes promised by 3D printing center around where goods will be produced and stored, which will in turn influence how goods will be delivered to consumers. In fact, in a recent survey, 30 percent of manufacturers said that 3D printing’s greatest disruption would land on supply chains. According to DHL, aftermarket supply chains like warehousing and spare parts distribution will be particularly affected by 3D printing. As 3D printing allows manufacturers to move production closer to the point of consumption, it can dramatically decrease the costs and environmental impact of maintaining global supply chains. In addition, it could make supply chains more efficient by delaying production until the last possible point in the supply chain for a given product because 3D printing often responds to consumer demand for highly customized goods.
Some goods that used to require assembly from dozens or even hundreds of different parts can now be 3D printed in one or only a few parts. If an increasing number of products can be 3D printed locally instead of requiring parts, components, or materials from around the world, this will shake up major parts of the transportation and logistics industry. In fact, some estimates have found that localized 3D printing could affect up to 41 percent of global air cargo shipments and 37 percent of ocean container shipments, as well as 25 percent of the trucking freight business that would have moved the goods coming in from air cargo or ocean containers. These major shifts could bolster the present reshoring trend, in which some manufacturing is moving back to the United States (and other home markets) due to rising manufacturing costs and other factors at international production sites.30 3D printing can address these problems by reducing manufacturing costs, increasing the flexibility of production, and producing higher quality products.
New Opportunities for Companies Involved in Logistics
3D printing offers logistics companies significant new opportunities to expand their services. For example, they could provide materials and support services to 3D printing companies, establish reverse logistics services to handle recycling and processing of 3D printed goods made of reusable materials, host data for 3D designs, or offer 3D printing services in warehouses or near major transportation hubs. In addition, logistics companies already often provide replacement parts services for their clients — this could be done more efficiently by 3D printing from a digital inventory of spare parts and components, with minimal need for expensive storage space for pieces that clients or consumers may not request for years. Third party logistics providers (3PLs) may need to adapt to 3D printing because it could reduce manufacturers’ need for the global reach and distribution capability that 3PLs provide.
UPS and Amazon Move into 3D Printing
Some major companies are already exploring ways to integrate 3D printing into their services and supply chains. For example, UPS has made significant investment in 3D printing, offering 3D printing services at about 100 of its UPS Store retail locations in the United States. UPS gears this service primarily to small businesses that require a way to use 3D printing to meet their own customers’ needs. The services offered include printing prototypes, creating complex parts to support small-scale manufacturing, designing custom accessories, and even printing architectural models.
CloudDDM claims that running this many printers CloudDDM claims that running this many printers in a single location allows it to reduce production costs by up to 50 percent compared to traditional manufacturing. Moreover, by locating the factory at that UPS facility, CloudDDM says it can gain as much as a 6-hour advantage over its competitors, allowing it to enter more packages into UPS’s network before its cutoff time each day. UPS handles all packaging and logistics for CloudDDM’s products. Through this arrangement, CloudDDM claims it is the first company able to offer same-day shipping for dimensionally accurate 3D printed parts in real engineering plastics, which it says will be critical as more and more companies move to rapid design iteration, virtual inventory, and fast-turn spare parts replacement.
In the future, Amazon may also alter traditional supply chains using 3D printing. It recently filed patent applications for delivery trucks that 3D print goods while in transit to customers. All items would be printed on demand, eliminating the need to maintain physical inventory. The system is not in place yet, so it remains to be seen whether it is feasible. If it does work out, in-transit 3D printing could be a major new development in the world of package delivery.
Foreign Posts Are Exploring the Use of 3D Printing
Several foreign postal organizations already see the value in 3D printing. By embracing these new technologies, posts are meeting the emerging needs of consumers and businesses, enhancing the value of their brands, and positioning themselves for the future in which 3D printing will be more prevalent. For the 3D printing companies that partner with posts, the benefit comes in the form of more direct connections to millions of customers.
France
In our July 2014 white paper, we mentioned how France’s La Poste first began offering 3D printing services by forming a partnership with the company Sculpteo in late 2013. Through this partnership, La Poste placed 3D printers in three post offices in and near Paris and offered an online marketplace where consumers can order 3D printed products. Customers can submit their own designs or pick and customize from a catalog with about 40,000 existing designs. After each order, La Poste delivers the products to the customer’s home or holds them for pickup at the post office.
La Poste has expanded in-store 3D printers to a total of six post offices. Beyond just printing in-store and offering a catalog of 3D printed products, La Poste now offers consulting services to help refine customers’ designs, which could help small businesses improve their 3D printed offerings. In addition, La Poste recently teamed with the Dutch company UCKi to offer a service that converts children’s unique artwork into 3D printed jewelry.
La Poste also partners with CIRTES (an engineering research center in France) to create fully customized packaging that protects fragile or unusually-shaped items during shipping. Through this process, which is available at a few post offices near Paris, La Poste takes a 3D scan of a customer’s item and then a machine precisely cuts layers of durable packing materials, like cardboard, so that they exactly conform to the shape of the item.48 With fully customized packing materials, items have substantial protection during the shipping process.
United Kingdom
In December 2014, Royal Mail started a 2-month trial program in which it partnered with the 3D printing company iMakr to place a 3D printer at a post office in London. Customers could select to have designs printed from the iMakr website at MyMiniFactory.com, or could bring in their own designs for printing. The products could be printed at the post office or an iMakr store, as well as delivered by Royal Mail. Through this partnership, Royal Mail made 3D printing services convenient and accessible for businesses and customers who might otherwise be unable to afford their own 3D printer.
The 2-month trial program was considered a success, and Royal Mail still offers an online catalog of 3D printed products for customers to order. The available products include reproductions of historical artifacts and archaeological objects, smartphone cases, office supplies, and other items.
By all accounts, the partnership has been mutually beneficial for Royal Mail and iMakr. Royal Mail found a partner with existing knowledge and experience related to 3D printing, so it did not need to develop those resources itself. iMakr benefited because such a high-profile partnership brought significant attention to 3D printing and made people aware of the types of products they could order or create. Because 3D printing is not yet fully in the mainstream of public consciousness, any increase in awareness can help the growth of the industry and the value of customizable goods.
Switzerland
In late 2014, Swiss Post entered a partnership with the 3D printing company my3Dworld. Together, they opened an online marketplace and organized a 3D printing “roadshow” across the country that gave customers the opportunity to buy 3D printed miniature replicas of themselves. Unlike the initiatives of other posts, the Swiss Post marketplace primarily focuses on selling a wide range of 3D printers, many different types of printing filaments and other supplies, a 3D scanner, and other items useful for customers to do their own printing. While it also offers some 3D printed jewelry and miniature figurines, the general goal of Swiss Post’s initiative appears to be meeting the needs of the country’s maker community.
Singapore
Singapore Post has recently introduced several “new generation” post offices that strive to meet evolving customer demands in the digital age. These locations offer high-tech services like 24/7 fully automated lobbies, tablets that let customers browse a wide range of products and start their transactions before they approach the counter, a business solutions center for local enterprises, and other features. Singapore Post describes these revamped post offices as lifestyle hubs for traditional and essential services.
At its flagship new generation post office, Singapore Post also offers 3D printing services. Customers and business owners can go to that post office to print out customized gifts or prototypes, or get their image 3D scanned and printed onto small figurines. The 3D printing and scanning services are part of an “Innovation Center” at that post office, which serves as a community maker space and fuels creativity.