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Potential Futures for Last-Mile Delivery

By Hire Dynamics
CATEGORY: Blog

E-commerce and logistics companies know all too well how expensive it is to get goods purchased to customers’ doorstep/work location from a warehouse or store.

This “last-mile” is, in fact, the most expensive – and most time-consuming – part of the delivery process: it’s about 53 percent of the entire cost of delivery.

What’s more, an item’s journey from warehouse or store shelf to the back of a truck, to a customer’s doorstep, also is often highly inefficient:

This last part of an item’s shipment process often involves several stops with delivery points – especially in rural areas –several miles from each other with just one or two packages dropped off at each location.

The final-mile delivery picture isn’t much better in suburban or urban areas due to the constant delays caused by traffic congestion.

So, E-commerce/Logistics companies are starting to embrace new “ways of doing things.”

A dedicated “last-mile” delivery fleet.

Amazon already has a fleet in operation, filled with vans and drivers that make only last-mile deliveries.

Yet while this might make deliveries faster and more efficient, the up-front cost for many smaller retailers could be prohibitive.

Allowing employees to make final-mile deliveries on their way home from work.

This provides team members with a way to make additional income at almost no cost to the retailer (no need to purchase vans, for example).

But it’s challenging to scale this approach to one that’s massive enough to meet customer delivery demand.

Last year, one large retailer, Target, acquired the same-day delivery company Deliv’s final-mile software technology and integrated it into its final-mile program. Deliv’s proprietary technology helps with batching and routing of orders.

But that may not be enough to help scale the “let team members deliver a package to customers” approach to the point that its ROI is acceptable.

Competitors sharing delivery infrastructure for “non-full” loads.

Truck and pallet loading technology now allows companies to see in real-time when a delivery truck still has room for more items.

Rather than letting a non-full truck leave, retailers/logistics providers can work together to deliver products in the same areas, thus fully loading a truck and saving both companies money.

This is why, for example, you may have seen Walmart trucks loading up items at Home Depot and then heading out for customer delivery. The two companies share real-time data and have made business agreements to ensure full delivery trucks. They then deliver products – for a fee, of course – to the other company’s customers.

Introducing the rise of “last-mile” crowdsourcing.

Crowdsourcing isn’t new by any means: look at the success of such crowdsourcing/apps as Lyft and Uber, Grubhub, and Doordash. Now retailers/logistics companies are starting to look at these tools’ low startup costs, asset-light needs, and even the potential for improved customer experiences for their final-mile delivery needs and challenges.

Using crowdsourcing technology, logistics companies, retailers (brick-and-mortar and e-commerce), and consumers can connect directly with “non-professional” drivers/couriers who use their vehicles to make deliveries.

This can help companies get online orders to customers faster while customers can get their item when they want it and where they want it (at the office, for example).

This also could potentially solve the challenge of delivering packages requiring customer signature at delivery: crowdsourced drivers can schedule with the customer to find a time that works for both, thus eliminating the need for subsequent delivery attempts.

What this could mean for E-commerce/Logistics companies when it comes to staffing issues.

Suppose the trial of using crowdsourcing last-mile delivery takes off. In that case, this could mean that lower-level workers of a distribution/e-commerce warehouse’s line could decide to go the entrepreneurial route and make deliveries in their vehicles rather than work for a company in the warehouse.

More tech in the warehouse will also mean that companies will either need to recruit team members with higher-level skills or upskill current workers in the higher-tech processes.

Note, however, that the future is not yet here.

With much new real-time tech, artificial intelligence, and robotics popping up in distribution centers and in delivery trucks coming online quickly today, it’s nevertheless early to say with confidence how last-mile delivery will look next year, let alone two or three years from now.

Except that it more than likely will be a lot different than it is today.

Hire Dynamics’ Logistics/E-Commerce staffing services can help you keep your distribution/warehouse/shipping processes running smoothly as we help you stay fully staffed with great contract, contract-to-hire, and direct-hire talent.

Learn more about our recruiting services.