Four ways to knock out last mile complexities.
By Ashokkumar J. Bafana
The parcel delivery market has matured in the last years. Despite the latest advancements in this field, the cost of last mile logistics is often close to 50 percent of the total logistics cost.
While some companies are investing in last mile delivery changes, such as drones and self-driving vans as the future of delivery, there are still many that are struggling and should invest in identifying a new set of business models and technologies for successful parcel delivery.
Here are four ways that logistics players can effectively use to re-imagine the last mile delivery:
One possible solution would be to provide provisional lockers for customers to pick up and deliver parcels. The lockers could be placed either at the courier express player’s (CEP’s) offices or around stations, shopping mall or grocery stores. These lockers can be operated 24/7 by consumers to pick up parcels at a convenient time for them. Once the parcel has been placed in the locker, a message is sent along with the access code to the consumer ready for pick up. This solution could eliminate missed and repetitive deliveries and at the same time reduce traveling time to the consumer’s location. The same concept of electronically managed lockers could be further extended to create individual lockers outside private residences.
IoT Based Delivery Notification
As the parcel is ready for delivery, a push notification is sent to an IoT-enabled device, provided by the logistics player to the consumer already programmed, with data stored in cloud. This ensures that real-time information about the parcel is sent to the consumer. The device also provides an option for consumers to select the date and time slot they prefer for the delivery. The parcel is delivered during the desired slot, ensuring there is no failed delivery.
Shared Economy or De-Stressed Value Chain-Based Delivery
Crowd-shipping offers a means of better exploiting under-utilized cars through picking up and dropping off parcels along the routes that people are taking anyway. Logistics players can leverage such startups to handle the surge in package volume and use the marketplace model for parcels, thus providing visibility of the parcels that are ready for pickup and delivery to crowd shippers. In order to strengthen this solution, organizations need to build a loyalty program for crowd shippers and consumers. As a result, this solution would further help logistics players to help e-commerce players to handle store-home orders as well.
Visibility and communication are key elements to ensure the successful delivery of the parcel at the desired location and time. Creating a mobility app for both driver and consumer would provide an opportunity for the driver and consumer to communicate, as well as providing the consumer with a higher visibility of the parcel. Drivers would have an option to communicate delivery timings to consumers based on real-time information about the route plan and current traffic conditions, and consumers could communicate about their availability. This would ensure that there are no failed trips made to consumer location and delivery happens at the first time.
While CEPs need to look again at their strategy for parcel delivery and reduce logistics costs, it is critical to take into consideration the growth in the parcel delivery, logistics costs, competitive landscape (new business model, startups, mergers and acquisitions, and capacity build up) and rapid technology changes. The above outlined ideas around new business models and technologies such as IoT, locker system, mobility and enabling shared services are immediate opportunities that need to be considered to solve the last mile complexities due to volume, speed, agility and repeated delivery.
Ashok J. Bafana is an associate consulting partner and head of transportation consulting practice at Wipro Limited. He is responsible for shaping transportation solution strategy, process consulting and providing thought leadership for logistics players in third party logistics, courier, express and parcel and freight forwarders. Bafana has more than 14 years of experience managing consulting engagements, transformation programs and global implementations for leading logistics and retail players across geographies. He can be reached at email@example.com.