The last mile is often described as one of the most expensive, inefficient, and polluting parts of the supply chain. Such a description seems most appropriate given that a recent study predicts that in 2020 global logistics spending will reach €9.5 trillion, with 40% of that total attributed to last-mile delivery. Another report– focused on the North American market- estimates that the last-mile delivery market is poised to grow by USD 44.88 bn during 2020-2024.
Source: Business Wire
Therefore, it is hardly surprising that 58% of Posts chose last-mile parcel delivery as being of utmost importance to their business. We’ve spoken about the subject before – Why the First and Last Mile Will No Longer Be a Challenge and why innovation and thinking outside the box will offer a solution.
Today, we want to explore some of these innovative solutions.
As Shortening the Last Mile highlights, delivery networks today are becoming more localized, shifting their supply chain to focus more on regional fulfillment strategies to shorten the last mile. Companies are seeing the benefits of moving away from the traditional central hub model to having multiple centers at the local level, especially in metropolitan areas. One example of this in action is DHL’s eCommerce division. They work with the USPS and its expansive network and presence countrywide to facilitate the last mile of delivery.
“USPS has a 60% share of the final-mile business-to-consumer (B2C) market in the US. We tap into its expertise and its knowledge of the markets it delivers in provides an effective solution for our customers.” — Lee Spratt, CEO of DHL E-Commerce Americas
While the postal industry already leverages PUDO and parcel lockers to offer customers a broad range of delivery options, some in the industry are looking for additional ways to customize and ameliorate the impact of the last mile on the delivery process.
Intelligent lockers- To help facilitate two-way logistics via product returns through product codes.
Smart mailbox – Installed within apartment buildings and allows for drop-offs and pick-ups to be arranged via smartphone.
In-car delivery service – Allows drivers to buy goods online and arrange for them to be delivered by to the boot of their cars. In 2019, bpost was the latest postal operator to join the ranks of Posts testing this service. They conducted this test at Cronos using the company’s car lot to see how the service could work and whether people would be interested in it.
Growing in popularity, parcel lockers provide a convenient and secure way for customers to receive deliveries at a location outside their home. The parcel is redirected to a locker where it is safely stored until the owner collects it. Customers can also send packages or return online shopping from these lockers. Some industry experts see parcel lockers as fundamental to a resolution to the last mile challenge. According to UPU data, in 2019, Canada had one of the highest use cases of parcel lockers serving more than 1.5 million residents in multi-unit buildings. Parcels lockers are also popular in China and growing in popularity in Germany and Spain (Correos).
Traffic congestion is perhaps one of the biggest impediments to fast and efficient delivery. Companies are using geo-map reading (i.e., real-time mapping) to produce optimized journey planning. The suggested course uses live data on the roads, and weather information to map the fastest journey.
Some postal operators are looking to build a robot designed to sort and deliver letters and parcels. DHL’s PostBOT can store parcels weighing up to 150 kilograms and carry them alongside the mail carrier for urban deliveries. The robot’s sensors track the mail carrier’s legs, following behind them automatically throughout the entire route. It can navigate around obstacles or stop when needed.
Keeping the customer informed regarding the delivery time and date of their package is paramount. Not only does this reduce the likelihood of failed delivery, but it also increases customer satisfaction.
Using chatbots, Posts can provide customers with tracking information, delivery times, and gather feedback.
Solving the challenges of the last mile presents postal leaders with opportunities for creativity, innovation, and diversification. The possibilities for a solution are endless. However, for Posts, time is not. Posts need to act now and look to solve this problem as eCommerce continues to escalate.