December 10, 2019

How is Last Mile Delivery Changing?

The way we shop is changing. Consumers are increasingly using e-commerce for their shopping. The ‘want’ to have a speedy delivery, ASAP, is no longer just nice to have, it is now the expectation and a growing ‘need’ for many consumers. By 2023, same-day delivery will be the norm for most e-commerce purchases. This means that logistics companies and their retail partners need to look for new technologies and supply chain models to manage increased parcel volume, shorten delivery time, and improve the customer experience. This will require changes to last mile delivery to support this on-demand fulfilment and to remain competitive.

What is Last Mile Delivery?

The “last mile” is the final step of a product’s delivery journey where the package arrives at the customer’s door. Last mile delivery is the most expensive and time-consuming part of the delivery process and is also a key component of customer satisfaction.

The Last Mile's Problem is Inefficiency

The final step of the delivery process usually involves delivery vehicles having multiple stops with low drop-off sizes. For rural areas, the delivery points on a route can be several kilometres apart, where only one package gets dropped off at each stop. Urban deliveries aren’t much better, although their drop-offs are closer in proximity and of a higher volume, they are caught up in the delays of traffic congestion.

Technology Solutions to Improve Last Mile Logistics

With logistics providers having to deliver volume with velocity to meet the consumer’s want to have more control and choice, new technology is necessary to keep up with these growing demands and for companies to drive brand differentiation for leading e-commerce.

Crowdsourcing

The crowdsourcing model has been applied to food delivery, transportation, and hospitality for services like Uber and Airbnb. Retailers are now considering the concept of crowdsourcing to ease their last mile delivery troubles. Digital platforms for crowdsourcing can assist not only retailers but also logistics partners and consumers to connect directly with local, non-professional couriers who use their own vehicles to make deliveries instantly. Crowdsourcing can speed up deliveries in urban areas where there is a high density of deliveries, making same-day shipping cheaper through these local couriers.

Autonomous Vehicles

With the increasing integration and enhancement of automation across all industries, we will see autonomous vehicles such as trucks and drones deliver 80% of all items in the future. Drones represent one way that e-commerce can accelerate delivery times due to being able to travel ‘as the crow flies’, flying over traffic congestion and busy navigation routes. Faster fulfilment times can occur thanks to drones which could result in lower shipping costs for customers and higher revenues for businesses. Electric-powered drones also reduce energy use and greenhouse gas emissions.

With short-haul and last-mile trips on the rise, there is a strategy to use robots to complete these shorter trips. For example, Refraction is a company that has developed a lightweight robot that is small enough to use a bicycle lane and reaches a maximum speed of 24 km/h. The contents remain locked inside the robot until it reaches its destination where it is unlocked by the customer who has received a key code.

Local Fulfilment Hubs

A common issue with last mile deliveries is that the origin of the products is too far from the customer’s location, which can make the delivery process very-consuming and costly. With perishable products like groceries becoming a popular delivery and more people expecting same-day delivery, it is important to shorten the distances that these goods travel. Companies are building and using urban fulfilment hubs that are closer to their customers. Developing an urban distribution centre, coupled with local delivery vehicles, can lead to a sustainable, profitable logistics model for urban markets.

Spot is a part of this change to the last mile delivery process. Our foundation data can be integrated into logistics providers navigation systems to continuously optimise their drivers’ routes to ensure productivity, reduce operating costs, improve customer experience and minimise car emissions. Spot can assist drivers in finding loading zones and delivery spots in real-time, where last-minute changes or re-optimisation can occur.

View our website to learn more about how Spot is supporting these intelligent transport systems to improve mobility in your cities and urban areas: https://www.spotparking.com.au/

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