Consumers’ need for easy and fast delivery has some logistics companies looking for innovative ways to make the last mile efficient and cost effective.
A recent survey by PwC indicated that e-shoppers have high expectations for deliveries and are willing to pay more to get their product faster.
PwC’s Global Consumer Insights Survey asked e-shoppers what factors, other than price, would get them to shop at a particular retailer. Almost one-quarter of those surveyed said they valued fast and reliable delivery and 23% said they valued a good return policy.
The survey also found that shoppers cared more about the delivery method and speed than about which company is doing the delivery.
More than 40% of online shoppers said they would pay more for same day delivery, while a quarter said they would pay to get their packages within a one or two-hour window of their choosing.
Further, more than a third of all respondents indicated that they would consider a drone to deliver their products – 16% for all products and 22% for low value products. About 26% said they would never use a drone while 30% said they never thought of that as a delivery option.
With this information in mind and a 25% increase year-over-year in e-commerce, shipping companies are looking to meet the demands of the market while at the same time saving money.
In urban areas, for example, where street congestion is common, some companies have started using alternative delivery modes such as scooters and bikes to save on labour and fuel costs. Where emissions are an issue, electric trucks and self-driving containers are solutions for some, such as DHL in Germany which has built its own electric fleet and Starship Technologies which has developed self-driving container robots for use on campuses, office parks, and some downtowns.
Frontier is one of many corporations that have invested in electric trucks to reduce costs and emissions and it is currently looking at installing electronic lockers in rural areas to better suit their client’s needs.
But what to do in rural areas ‑ where distances between drop-off points can be long – to deliver items quickly and cheaply? One alternative is the use of drones. For the past two years in rural England, Amazon has been delivering packages with drones and plans to move that model into urban areas as air traffic control regulations change. UPS and Mercedes-Benz are also testing drones launched from their trucks to deliver the “last yard.”
Perhaps the most cost effective last mile delivery is the use of mini-depots or electronic locker systems. This system is very popular in Europe and is currently seeing an emergence in North America thanks to Amazon.
Packages are dropped off at the lockers by the delivery company and picked up by the customer with a code sent by the shipper.
The United States Postal Service is also using lockers with its Go Post program, to not only deliver packages but to do pick-ups as well.
Frontier Supply Chain Solutions is also looking at locker options for its rural clients in Manitoba and has opened evening deliveries in Toronto as a last mile option.
Other last mile advances include Amazon’s in-home delivery method where the delivery person uses a smart lock and camera to enter the person’s home to drop off their package. Or in Asia where shipping companies are offering trunk delivery, where packages are left in the trunk of the recipient’s car.
In Africa and India, where technology is a head of logistics, cheap labour through small and medium sized couriers are used to deliver packages bought online.
In conclusion, as e-commerce sales increase and consumers demand easier and faster shipping, logistics companies are answering the call by innovating the way they perform the “last mile.”