On Friday, June 19, the iPhone 3G S launches, and for the first time, Apple has made launch day home delivery available. This has made some things clear – for example, we know that phones are shipping from China to Alaska all on the same day. I was curious about the magnitude of this delivery – size, cost, etc. Here are some estimates:

**Total Sales**

Apple sold at least 1 million 3G’s in the first weekend. It’s reasonable to assume that the number will be about the same – ease of home delivery counterbalancing the extra few days. So we assume 1,000,000 phones shipping from China.

**Getting to the US**

We know that the phones are shipping from Hong Kong to Anchorage via UPS. Unless UPS has some undiscovered stealth supertechnology, it’s by plane. Let’s assume they’re all shipping at the same time (though that doesn’t matter, it’s more interesting).

I don’t know the whole UPS fleet, but they bought 27 Boeing 767-300ER’s in 2007, so we’ll use those for our size analysis.

**How many planes?**

The limiting factor could be volume or could be weight.

**Volume**

The 767-300ER holds 30 LD2s. Now, the phones could be shipping in of three forms:

- raw phones in trays to be Apple-packaged and ship-boxed in Alaska or another port.
- Already-assembled Apple boxes, still not packaged for ship.
- Fully shippable boxes (for home delivery)

Obviously the tradeoff in each case is volume you can ship v. assembly time on landing. The first seems really unlikely – there’s no way accessory boxing is happening across the country in ports in such a tight timespan. I would assume the second case, because ship boxing is a partly-automatable process and because the volume savings are so significant.

We don’t know the size of the new 3G S box, but the 3G box was 2.25″ x 3.5″ x 5.75″, so let’s assume the same dimensions. Each LD2 is 61.5″ x 60.4″ x 64″ (in their more generous size).

As I haven’t yet solved the packing problem, let’s just assume 80% utilization of the full volume. (That’s probably generous with pallets and such.)

`181683 in`

^{2}(LD2 volume) / 45.25 in^{2} (3G volume) * .8 = 4200 boxes

So 30 DL2s = 126,000 boxes: thus it takes 8 fully-loaded cargo planes to bring 1,000,000 iPhones to the US.

**Weight**

Weight’s not a limiting factor. UPS says my package is 0.5kg, and the 767-300ER can carry 96,870 kgs – at 80% utilization that’s 155,000 boxes/plane.

Estimate, then, isĀ **8 cargo planes **to get the phones to the US. I like to think of them in Top Gun formation.

**Cost**

The 767-300ER uses 3.47gal/mi: the air distance is ~5100 miles, so each plane uses 17,700 gallons: the estimated price today for jet fuel is $1.80/gallon (nice price if you can get it – assumes bulk discounts), so that’s $32,000 for gas – add another 20% for overhead and you have ~$38,000/flight to Anchorage. Anchorage to Miami is another 4000 miles: assume an average of 2000 miles for in-US travel (and higher overhead) and you add another $20,000/flight’s worth of travel (obviously spread across many other planes, many with smaller cargo holds). That’s $464,000 in flight costs, or** $0.46/phone**. (I haven’t factored in packaging and local delivery costs – either from Shenzhen to Hong Kong [23 miles] or from the airport to your home or store – which aren’t insignificant.)

It’s also ~57,000 lbs of CO2, but, y’know, whatever.

**Final Words**

Only $500K to get the phones to local ports in the US? Really? I’m surprised it’s so low, but math is math (though my packing assumption could be flawed).

If you add the UPS packaging in China or HK, you probably add 3-4X the planes and the cost, so there’s no way that’s happening. Anchorage was probably quite busy today.

Cool analysis! One refinement: according to this site, fuel’s only 40% of UPS’s operating costs.

http://aviationdb.net/aviationdb/FuelExpenseByCarrierQuery#SUBMIT

Good point and helps with the overhead analysis. Thanks Dan!

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