August 21, 2019
With the boom of the on-demand industry, pretty much everything we desire seems to be just one click away. The online consumer is wishing for nothing less. It is the last mile of a delivery though that can make this bubble of convenience burst pretty quickly - think of all the lost parcels and hours waited at home for your order to arrive. For businesses, creating that instant surge of happiness for you is actually anything but easy - Logistics, companies and urban planners are racking their brains over cracking the inefficiency of the last mile.
As you might have guessed, all this made us quite curious about what’s actually going on behind the scenes. We want to know how to overcome all these hurdles along the way and add another little piece of ease to our everyday lives.
Here is a little breakdown of the last miles challenges and our thoughts of possible solutions.
Cost is a big one here. In regards to total transportation costs, the last mile comprises up to 53% of those - making it the least efficient part of the supply chain. Expectations of free shipping and next day deliveries add up to this.
Due to increasing digitalization and convenience services in every area of people's lives, the smooth and flawless process of getting the delivery to one's doorstep is exceedingly becoming what customers care most about. On top of that, for companies that package being delivered is an extension of their brand. The consumer is basically coming face-to-face with the brand, which makes it the biggest opportunity to heighten customer satisfaction.
If you live in a city and have even slightly observed your urban surroundings you’ve probably witnessed it first hand - urban congestion and crowded cities make it pretty tough to satisfy the growing demand and rising expectations of super quick deliveries. Add unpredictability in transit (like weather conditions), an incorrect address or remote locations, just to name a few, and you can see where this is going.
The worst part is, all those delivery trucks and vans that also produce a fair bit of emissions, are often only half full when they roll out for deliveries. This is mostly due to low drop sizes and stops along the route that are far and few between.
It’s not all hopeless though - Where there is a problem, there are solutions.
Same old, same old - isn’t always all that bad. Sometimes, all that’s needed are some new perspectives! The city of Utrecht, for example, implemented a zero-emissions electric barge nicknamed the “Beer Boat”.
Since 2010 it’s carrying beer and food to the city’s downtown restaurants by using waterways. Other electric barges in Amsterdam not only deliver but even collect organic waste, which is then turned into biofuel in processing plants! Isn’t that cool?
It becomes clear that cities, logistics, as well as urban planners, are equally part of solving the inefficiency of the last-mile. Tackling this mountain of issues calls for teamwork!
A centralized platform, hub or network for similar companies, could do the trick to fill up the delivery vans & trucks that are barely loaded. Parcels could be distributed more efficiently between different companies and their delivery vehicles.
Like a big pool of parcels from different companies with every single parcel going into that one van with the same route!
Delivery Driver Experience and Smart Delivery Vehicles are also areas with huge potential for improvement and innovation.
Do you know that feeling? You’ve been waiting all day for your package that was supposed to arrive hours ago and just as you leave the house for a second you get a notification of a “failed delivery attempt”.
Keeping the customer in the loop with timely notifications eases the delivery process for both sides - the bother of sitting at home in suspense becomes unnecessary and the chances of the customer being absent much lower.
Next to that on-demand experiences have become firmly embedded into people’s everyday lives - be it a mobile app to book a ride, send flowers to your loved ones or order lunch to your office. It’s all possible and has made premium features like real-time tracking a standard. The online consumer expects nothing less and certainly doesn’t like to wait.
Making that quick and instant gratification happen is another story though. Groundbreaking ideas and innovations are needed to tackle all these factors. Does your startup have one?
Then head over to our Future Logistics Challenge! Applications are still open until September 23rd.