Think of your supply chain. It probably looks something like this.
- Product gets shipped on a line-haul truck to a warehouse or storage facility
- Product gets delivered by box truck to retail location
- Product is purchased at the store (deliveries end) OR online, requiring one more delivery to get the product to the customer’s home
While growing consumer demand means this supply chain must grow as well, delivery growth faces two major bottlenecks- the availability and the cost of drivers.
As recently as 2017, the American Trucking Association reported a shortage of 45,000 drivers. This trend will continue as fewer young people seek work as drivers because of the high-risk and high-stress work of a full-time driver.
Meanwhile, customers are ordering more, and delivery is gaining popularity. There are simply more deliveries than there are drivers to make them. Your business may feel this pain.
While the entire supply chain feels the stress of driver shortages and autonomous vehicles will impact every leg of the journey, this post will focus on the last mile- delivering goods to the end customers.
Think about your delivery business. When did you start?
The most prescient of you launched home delivery well before the dawn of the internet. Phone orders would come in, you’d load a van, and deliver the goods. This early experience likely helped delivery become a substantial part of your total sales volume. Boy, aren’t you happy you started early.
Others of you are just beginning to experiment with delivery. Amazon’s recent purchase of Wholefoods made it clear that delivery is an enormous opportunity. And if you don’t go after it soon, you’ll fall behind.
E-commerce share of total global retail sales
Source: statisa.com
Whether your business was one of the first to do deliveries or is just getting into the market, know this:
e-commerce made up just 10% of all retail in 2017 and is expected to double in the next 5 years.
That’s right. Imagine hiring and managing 2X as many drivers as you have now. Imagine the logistics of 2X as many orders. Imagine the costs of delivery- which seem high now- doubling by 2022. Imagine everything in your supply chain doubling- except for your bandwidth, and the price you can charge.
It’s hard to imagine. And unless your business innovates in a major way, costs will grow, hiring will become ever-more-difficult, and you’ll miss the opportunity of delivery on a large scale.
To combat this disparity between growing demand for delivery and shrinking supply of drivers, autonomous vehicles are beginning to enter the supply chain.
These vehicles enable a safer, cleaner, and more efficient supply chain. Because they don’t get tired or distracted, autonomous vehicles can work longer hours and with fewer accidents. Because they don’t speed or brake hard, they use less gas and better maintain engines and brakes. And because they can be smaller and lighter than traditional vehicles, they can move goods faster and more effectively.
With all these benefits, autonomous delivery vehicles have a lot to offer the typical supply chain- especially in the last mile, where drivers and gas make up almost 70% of the cost.
So all of this sounds pretty good. You read this article, and like the idea of a self-driving delivery van. You have a few meetings, look at some numbers, and are ready to purchase your first autonomous delivery vehicle.
But how does an autonomous delivery actually work?
Since the driver isn’t there (obviously) to load, unload, and deliver goods, Merchants and Customers need to play a larger role in this process.
MERCHANT PROCESS
A Merchant, as we define it at udelv, is anyone who will be loading the vehicle. This might be a grocery clerk, warehouse employee, or dedicated picker/packer. With udelv, it takes two steps.
- Share orders
- Load orders
Share orders
Since you can’t hand a piece of paper to a driver who punches an address into the GPS, you’ll need to share order information with the autonomous vehicle in advance. You can do that with any delivery management tool (like OnFleet) or an easy entry tool on the udelv website.
Algorithms then do what was previously a manual task. They route and schedule the deliveries, and let your customers know what day and time they can expect their delivery. Most importantly, the times are in 15-minute windows, providing your customers amazing visibility and convenience (more on this later).
Load orders
All of your orders are input into the udelv Merchant app. When the vehicle arrives at your store or warehouse, or other loading location, you can open your app and see all your orders for the day.
Select an order, pick a compartment, and load it the order.
If you need to double check an order or fix something, you can go back and re-open any compartment. All of this takes less than 10 seconds/order.
CUSTOMER PROCESS
As a Customer, everything about autonomous deliveries needs to be as good or better than the current experience. Here, the focus is on convenience and easy access.
Convenience
With an autonomous vehicle, customers can track their order at every step in the process. Tracking provides peace-of-mind and greater trust in the Merchant and delivery process.
Knowing the arrival time ensures that customers are available to receive the order. Standard 2–3 hour delivery windows force Customers to wait around impatiently and powerlessly. An autonomous vehicle’s precise tracking and 15-minute delivery windows means that Customers can schedule their days accordingly, transforming delivery from a chore into a pleasure.
Easy Access
Getting a delivery from the vehicle into the customer’s hands is all about empowering the customer. The first step is ensuring the Customer knows when and where the order will arrive, so they can be available.
The second step is getting the customer to retrieve the order. Autonomous delivery companies can provide access to compartments through keypads, apps, text-to-open tools, and more. And once a customer removes their order, the vehicle continues to its next destination- safely and cheaply.
Autonomous delivery vehicles promise to make deliveries cheaper for Merchants, more convenient for Customers, and more sustainable for the economy and the environment. To take advantage of the benefits, Merchants should start thinking about and testing autonomous deliveries today. Just like with innovations of the past, from e-commerce to mobile apps, the Merchants who take advantage of autonomy the earliest will see benefits the soonest.
If you’re interested in learning more about piloting an autonomous delivery vehicle, visit udelv.com/FAQ or email sales@udelv.com.
This post first appeared on advancingretail.com
