The continued growth of e-commerce has placed logistics companies in the unique position where they have to be innovative in order to meet sales demands.
At the basic level, warehousing is the first step in fulfilling sales. Companies are not only automating their processes but some are using robots to do it. British online-only supermarket Ocado processes 3.5 million items every week by robots, who work alongside humans, when filling orders.
“It’s only a matter of time before all warehousing is done through automation. The only questions are how prepared are we for that and what are the costs and savings,” said Frontier Supply Chain Solutions president and CEO Michael Butterfield.
Outside of warehousing, delivery is another way logistics companies are looking to cut costs while still providing a level of service customers have come to expect.
One of the biggest online retail markets is China. It’s estimated that $240 billion of online sales were generated in the country in 2017. Chinese logistics companies are setting up pilot projects where orders are delivered by robotic cubes, shuttles, and drones.
Mordor Intelligence reports a last mile delivery by artificial intelligence can cost 29-cents per delivery compared to $1.36 if delivered by a human. A further 50% reduction in delivery costs can be seen if deliveries are done by drones.
Another delivery mode that can boost sales is the use of electric lockers. These lockers are popular in Asia and Europe and are seeing an emergence in North America. The appeal of these lockers is that they allow customers to pick up their orders at their leisure, while saving logistic companies money in performing the last mile.
Frontier is currently looking to use lockers in performing the last mile in rural towns across southern Manitoba.
“These lockers will not only deliver packages to customers, but they can be used for delivery pick-up as well,” said Butterfield.