Last mile trends
Crowd sourcing
Using Uber as a model, this shift seeks to create greater elasticity in logistical systems, making them less costly to maintain during slack hours. Trialled since 2015 but ramped up in November 2017, Amazon Flex is designed to scale its last mile delivery capacity in times of high demand, simply by posting more routes on its Flex app to drivers who have already been vetted and are available for single-day tasks. Shutl performs in a similar way, whilst Hitch offers drivers the chance to turn their ‘commute into cash’. Users create profiles on the app and join a community that rates and vets itself. ‘Shippers’ put out requests to have packages delivered, and ‘Travellers’ can input their travel plans to see if there are available deliveries along their route. Relatively late, Uber has got in on the act with its UberFreight app.
Faster fulfilment
Since Amazon Prime Now launched two-hour delivery it has increasingly become the norm. Walmart stepped up in its fight against Amazon and Fresh Direct in the USA this summer when it announced Jet.com would open a distribution centre in the Bronx to bring same-day delivery to New York City — where it has no physical stores. This attitude is already affecting brick and mortar stores: Amazon purchased Wholefoods partly to give it a physical base to deliver food from.
Insourcing deliveries
Tony Hseih, CEO of the online shoe retailer Zappos, suggested that outsourcing distribution was the biggest slip-up he made. ‘We should have considered warehousing to be our core competency from the beginning. Outsourcing that to a third party and trusting that they would care about our customers as much as we would be one of our biggest mistakes.’ As many retailers become online portals attached to warehouses, greater distribution becomes a key component in a company’s offering and many are bringing it back in-house. Although it should be pointed out that Zappos is now owned by Amazon.
Live traceability
The Geman company DPD launched live tracking back in 2014, but it is only now becoming an offering industry-wide. With updates every 30 seconds, parcels can also be redirected up until the last minute. Amazon is rolling it out across the USA, but it is also being quietly trialled in the UK.
Predictive fulfilment
This is perhaps the ultimate application of big data and machine learning in retailing thus far. Using analytics of consumer behaviour based on previous sales figures, logistics can help manage inventory by moving goods closer to customers in anticipation of them ordering more.
The last country mile
In China, Alibaba announced it was going to set up Taobao centres in 150,000 villages so as to reach one-quarter of the country’s population. In India, Shadowfax is working with family stores as dropping-off points and in the West UPS and FedEx are looking at how to make rural routes work with in-store lockers.
Consolidation depots
Companies are establishing facilities on the edges of cities, often with the support of government who want to limit congestion. In the UK, cycling companies are now lobbying government for last-mile delivery centres. Consolidation centres bring together different companies that use cargo bikes under one roof. At the moment operators individual onward delivery routes are determined by how they arrive from the long distance logistics firm. The facility allows bike operators to organise it into the most efficient onward delivery pattern.
Originally published at Plan.
