Modern technology has transformed the “business” of the business world; rather, it has disrupted traditional ways. Therefore, gone are the days when people would invest hours in shopping, or wait for days for parcel delivery. Today, all activities take place in real-time, with accuracy and efficiency. Above all, the technology trends in last-mile delivery have changed the outlook of the parcel and package industry.
Online shopping is a common practice in the modern world and has seen enormous growth over the past decade. First, online shopping saves time and helps you in comparing the products and prices. Further, it is convenient, who does not love to get their favourite products just sitting at home. Due to the last-mile delivery trends, customer gratification has become a reality.
Imagine yourself in this place: Let’s say you have given an order for a birthday cake to surprise your sibling at midnight. The outlet took the details and promised to deliver the chocolate cake by 11:55 pm. However, it’s 12:10, and your parcel hasn’t arrived yet. Therefore, your whole efforts will go in vain, and you probably won’t contact the same baker again.
Some parcels and documents are time-sensitive, and in-efficient delivery service may cost the company to lose a client. Where successful last-mile delivery models help companies grow their consumer base, a poor last-mile strategy may cause severe damage.
Hence, the businesses are shifting their focus to the technology trends in last-mile delivery. Since order fulfilment is the backbone of the retail business, it is the right move.
What is the Last-Mile Delivery?
Today, you place an order with an e-commerce company, and then sit back and relax. All you have to do is to wait for some hours until the product reaches you. However, the process is not that straight forward as it seems. Instead, the journey involves many steps and phases. Last-mile delivery is just the final link in the supply chain.
Last-Mile delivery is the movement of goods from a transportation hub to its final destination, which is mostly the end user’s home or office.
Example of Last-Mile Delivery
For instance, when you order a bag online, the company may hire a third-party courier server for order shipment. Once the order is packed, the delivery agent picks the parcel, and finally, it gets delivered to the last mile. Hence, the process that begins with the placement of order ends with the safe product delivery at your doorstep. Thanks to the likes of FedEx, UPS, DHL, and lately, Amazon, the B2B, B2C, and p2p deliveries have become easier.
It is easy for most courier services, either big or small, to move the products in bulk across the globe cheaply. However, the last leg in the goods delivery system, i.e., the last-mile delivery is a rather challenging one. Since the last-mile delivery is an individual drop and not a mass, it’s sometimes a costly affair.
The main goal of the last-mile delivery business model is to ship the parcel in real-time in a cost-effective way. And, the technology trends in last-mile delivery can help greatly in quick delivery and cost reduction.
Significance of the Last-Mile Delivery
Today, time is money, and the fast-paced world has given rise to the e-commerce market, and last-mile delivery trends. Now, the customers prefer to shop and transact online rather than spending hours in malls.
At present, the e-commerce market stands at $3.3 trillion and is likely to hit $4.5 trillion by the year 2021. Moreover, about 22% of the people around the world make purchases online, and the number will grow to 95% by 2040.
eCommerce businesses depend on shipment services to send their products to the client. Also, the huge companies have a large consumer base, and they cater to both national and global customers. For this reason, they need delivery services that assure quality, thereby handling the workload.
Since the last mile delivery is the final phase of order shipment, it is also the most important in the supply chain process. Also, it is at this stage that the customers form an image of the carrier and the business involved.
Hence, the quality of service given at this stage may either increase the consumer base or may diminish the customer’s trust.
Last-Mile Delivery Market Size
The last-mile delivery technology has made it possible for e-commerce companies and retailers to survive in the market. Hence, companies are making use of the innovation in the shipping industry for faster and flexible last-mile delivery.
It comes as no surprise that nearly 25% of the customers are happy to pay for instant delivery today. And, the boom in eCommerce has also caused the demand for parcel shipments as people love ease, speed, and accuracy.
Further, thanks to the technology trends in last-mile delivery, the parcel delivery market is growing fast. While it is growing at a rate of 10% in mature markets, like America, the growth rate in developing markets is up to 300%. Also, the last mile delivery comprises 28% of the world’s total transportation cost.
The US last-mile delivery data shows that the last mile covers up to 50% of the total parcel delivery cost. Therefore, the demand for last-mile delivery is increasing with every day, and it seems to grow in the years to come.
Customer satisfaction is at the core of the last-mile delivery business model. However, companies cannot achieve it without fast, reliable, and efficient technology trends in last-mile delivery.
The Challenges of the Last-Mile Delivery
You may think that the last-mile delivery process is quite simple. However, from shipping to delivering the parcel at your doorstep, the process involves many challenges. First, the inefficiency, or poor last-mile strategy, is a big challenge for the last mile delivery industry. Also, the high operating cost and clarity are some other problems.
Inefficient Last-Mile Delivery Models
You probably have had a bad experience with a company or a food outlet when it comes to last-mile delivery. While the order was marked to reach in half an hour, you might have waited for your pizza for two hours. Resultantly, it causes you to never order from the same company again.
Also, this may have happened with one of your parcels intended to get delivered the same day. Certainly, it is infuriating and probably led you to order cancellation. Hence, inefficiency is a severe challenge to the last-mile delivery industry today.
The companies committed to same-day deliveries may have to bear the excessive fuel and labour cost for only a few items. Further, a poor last-mile strategy can add to the operational cost, thereby increasing the risk in the last mile delivery.
Also, at times shipping services outsource the last-mile delivery, which is cost-effective and useful most of the time. However, the customers don’t show much interest in paying for the shipping services; rather, the retailers have to pay. Hence, innovative shipping solutions come with a cost.
Another challenge the last mile delivery faces are to ensure a clear last-mile delivery. Today, the customers expect to get their orders in real-time, with a minute-to-minute update of the delivery status. And the companies who fail to meet the user desire fall behind.
However, providing the customers with innovative courier solutions tracking helps to overcome this challenge.
The Solution: Technology trends in Last-Mile Delivery
While the last-mile delivery market is rapidly growing, there is no denying to the many challenges it is facing. From cost reduction to regulatory compliance, shipping charges to logistics, there are many problems.
However, innovation in the shipping industry and last-mile delivery trends have provided excellent solutions to many of these problems. Hence, tech companies are addressing the issues in the last mile delivery process.
Here are some of the top technology trends in last-mile delivery that are likely to take over the last-mile delivery market.
Today, the venture capital investments in the supply chain and logistics are higher than ever before. Now, the focus of the VCs is shifting towards the companies with IT infrastructure. Hence, investors don’t consider physical assets, like delivery vehicles.
The new shift has given rise to crowdsourcing; which is one of the technology trends in last-mile delivery. As a result, companies use analytics to find the right delivery agent. For instance, companies like Postmates and Uber RUSH post ads for shipping jobs and provide the cars to drivers. Thus, crowdsourcing helps companies to reduce the cost, thereby providing spot-market shipping by independent drivers.
On-Demand Delivery Platforms
Another last-mile delivery trend is the on-demand delivery platform or outsourcing. The companies may outsource the last mile delivery to a local third party courier operating closer to the customer’s order destination. For this purpose, many on-demand delivery platforms are connecting the shippers with the trucking companies.
Hence, the on-demand delivery services may cut the cost and deliver the shipments within the city at the scheduled time. So, whether you are a consumer, a startup owner, or a large corporate, on-demand delivery makes the whole process hassle-free.
Traceability of the package or parcel is yet another technology trend in last-mile delivery. In today’s world, the customer not only expects the parcel to get delivered in real-time but also want live tracking. Thanks to the instant delivery apps and smartphones, step-by-step last mile tracking has become a possibility.
Hence, smartphone technology allows you to trace your parcel from shipping to last-mile delivery at your place. Also, it notifies the customer of the estimated delivery time, thereby helping to relieve the stress.
Hybrid Fleet System
In the conventional business models, the trucking companies have full operational control as they have their entire fleet. In contrast, more companies today are adopting the hybrid fleet model for carrying out the delivery operations.
The model is a mix of a trucking company’s fleet, freelance drivers, and third-party partners. Due to flexibility, the hybrid fleet is one of the growing technology trends in last-mile delivery.
Big Data and Analytics
At the moment, Big Data is emerging as one of the key technology trends in last-mile delivery. The “big data” is making the prompt and flexible delivery of products to the end-user. Also, the latest trend is driving business intelligence, thereby allowing companies to make effective data-driven plans.
Further, the predictive analytics helps to identify the business patterns by providing an insight into valuable granular data. Hence, companies can use data to improve the last-mile delivery process, such as route optimization.
Autonomous Last-Mile Delivery
At present, last-mile delivery has many constraints, including labour cost, workforce availability, and whatnot. However, electric vehicles, autonomous and semiautonomous delivery vehicles are expected to become the next big tech trend in last-mile delivery.
First, the autonomous last-mile delivery vehicles are faster and cost-effective. The self-driving vehicles are likely to reduce the delivery cost by 10 to 40 per cent. Also, the scalable technology would help in increased productivity, thereby making the delivery operation possible 24/7.
Evaluating all these benefits, it’s no surprise that Amazon has already played a gamble on autonomous vehicles by investing $530 million in Aurora.
The self-driven last-mile delivery vehicles are gaining fame because of AI. Further, this machine learning is playing a part in routing deliveries and responding to the delivery traffic dynamically. Above all, it is helping to adapt to complex real-world scenarios in real-time. Likewise, it is making the process faster than ever.
Hence, companies are using AI to face the many challenges of the last mile delivery by data visualization, integrated systems, and instant communication.
Last-mile delivery is likely to become asset-intensive in the coming years. Also, it is expected that beyond 2030, the robots will be shipping the parcels at the customers’ doors. Robotization is a significant technology trend in last-mile delivery to hit the markets in the coming years. Instead, it will be the centre of urban freight solutions adding value to customer convenience.
Robotization will disrupt the e-commerce packaging, shipping, and sorting stages in the last mile delivery process. Also, the technology will influence the transportation upstream.
Interestingly, the first Robert-delivery pilots are in the making, but when it will be too early to say when this tech will come into action.
Due to the emerging tech trends in last-mile delivery, the process of product delivery to the end-user has become more refined over the years. Today, there are a plethora of options and solutions to address the many issues of the last-mile delivery market. The advent of technology has increased the agility of companies, minimize the cost, and enhance productivity levels.
Also, last-mile delivery trends have allowed parcel traceability and instant product delivery. Above all, tech has made order serving and happiness of the customers possible. Hence, improving the last mile delivery with various last-mile tech trends will help the companies to thrive in the last-mile delivery market.
In the coming times, you might receive vehicles through self-driving cars. And perhaps the person who would drop the item at your doorstep would be a robot.