It was only a few years ago when we had to, after making an online order, wait a few weeks for the items to arrive. There was also the rather cumbersome process of having to sit at home all day, watch the door and wait for the deliveryman, because missing the delivery would mean a world of hassles. And sometimes the scheduled order never came, drawing the ire of many. Today, the experience is markedly different. We have the option of same- or next-day delivery; and can choose to store our items in parcel lockers or collect them at convenience stores nearest to our homes. When it comes to last-mile delivery, it is the customers who are in the driver’s seat.
By 2020, Asia Pacific’s booming e-commerce market is expected to be worth US$1.4 trillion1. In the increasingly-competitive milieu of online retail, e-commerce stakeholders are realising one thing: last-mile delivery is a key differentiator that affects customers’ decision making. Last-mile delivery refers to the final stretch where items purchased online are transported from a local warehouse to the destination, typically a customer’s residence.
Consumer behaviours and expectations are redefining the last-mile experience. According to a report by McKinsey2, nearly 25 per cent of online shoppers are willing to pay significant premiums for same-day or instant delivery. Smart technology and sensors now enable consumers — and shippers — to track the deliveries via SMS alerts, emails and even Google notifications3.
But beyond convenience and accountability, clever last-mile delivery strategies can help solve very real problems. For example, by signing up for the Amazon Key service, consumers can allow Amazon’s delivery drivers to enter their homes even when they are away. PharmExec.com opines that this service could very well be the answer to a last-mile pain point that has long plagued the pharmaceutical industry4. Patients who purchase temperature-sensitive items or dietary supplements such as probiotics can authorise the delivery personnel to enter their homes; in turn the latter can help store the items in the refrigerators. This ensures that the purchased goods do not go bad; patients do not have to take a day off from work just to wait for the deliveries too. Online retailers who can offer similar meaningful last-mile experiences will likely thrive.
Technologies changing the face of last-mile delivery
While the last-mile sector has seen several new inventions and revamps over the years, there is still room for advancement. Entering the picture is artificial intelligence (AI). In 2017, Guangdong iBosst Ltd. launched the world’s first smart logistics express5. This is a cable rail system that spans both urban and rural China, and it promises same-day delivery of goods nationwide and one-hour delivery city-wide at half the usual costs.
The cable rails, set at low altitudes, form an “expressway” in the air that unmanned shuttle robots carrying goods up to 100 kilograms each can travel along. The GPS-monitored robots can reach their destinations quickly, consuming low amounts of energy while doing so. This technology is set to benefit businesses that have not been able to offer delivery services, such as farmers in agricultural areas — they can soon deliver their perishables to customers6.
Besides AI, blockchain technology is also revolutionising the last-mile industry. Blockchain, as defined by authors of Blockchain Revolution Don and Alex Tapscott, is “an incorruptible digital ledger of economic transactions.” FreshTurf, a start-up in Singapore, has partnered with IBM’s developers and designers to create a blockchain-distributed ledger platform prototype on the latter’s BlueMix cloud platform7.
This solution manages transactions between four stakeholders: merchants; logistics vendors; locker companies; and consumers. With it, they can establish a network of storage lockers connected via blockchain throughout the country, allowing both consumers and suppliers to keep track of shipments more easily.
1 Asia Pacific Ecommerce Market to Reach US$1.4 Trillion in 2020: https://www.forrester.com/Asia+Pacific+eCommerce+Market+To+Reach+US14+Trillion+In+2020/-/E-PRE8924
2 How customer demands are reshaping last-mile delivery: https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/how-customer-demands-are-reshaping-last-mile-delivery
3 What Are the Trends in Last Mile Logistics?: http://cerasis.com/2017/10/13/last-mile/
4 Did Amazon Just Create a Solution to Pharma’s Last Mile Problem?: http://www.pharmexec.com/did-amazon-just-create-solution-pharma-s-last-mile-problem
5 The First Smart Logistics Express Launched to Reduce Costs and Improve Efficiency for Logistics Sector: https://www.prnewswire.com/news-releases/the-first-smart-logistics-express-launched-to-reduce-costs-and-improve-efficiency-for-logistics-sector-300485018.html
6 Breakthrough in Guangdong Could Revolutionize Logistics Worldwide: https://www.pressreader.com/indonesia/the-jakarta-post/20170712/282200830959428
7 Using blockchain, FreshTurf simplifies package delivery in Singapore: https://www.ibm.com/blogs/cloud-computing/2017/03/blockchain-freshturf-package-delivery/