Is the logistics ‘last mile’ getting shorter?
In February 2005, Amazon launched Amazon Prime – an all-you-can-eat, express shipping membership programme covering millions of products. The company’s vision was that fast, next-day delivery should be the norm, rather than an exception. At a time when most customers expected to wait an average of four to six business days for a delivery, Amazon Prime was revolutionary.
A lot has happened since then. Other retailers followed suit and now also offer a next-day delivery option, making it the standard for many customers who not only demand speed, but also want convenience in terms of time and place for delivery of their items. This includes having the option to divert an item to a neighbour, click-and-collect from the store, change the delivery date, select a delivery window as narrow as one hour or – as Amazon achieved – having the goods delivered within an hour of the order being placed.
This race for delivery speed and customer satisfaction has a knock-on effect on logistics companies. “A lot of retailers can take orders up to midnight, so the time you’ve got to draw products from an etailer to local distribution centres and on to a dedicated parcel round is much shorter,” says Mark McVicar, transport analyst at Barclays bank.
And things are getting even more complicated, if we consider the fact that by 2030 the world is projected to have 41 mega-cities with ten million inhabitants or more. Urbanisation and our soaring population growth will place pressure on businesses to ensure they deliver millions of items each day to exactly the right place at exactly the right time.
The response by logistics companies is to invest tens of millions of pounds in technology, from physical machinery to software, to especially tackle the final stage of the delivery more efficiently – the crucial ‘last mile’.
DPD, a carrier owned by French state-backed La Poste, uses technology to calculate an optimum delivery route for each driver’s set of parcels. Customers then receive a message with a one-hour timeframe during which the parcel will arrive – a huge improvement from drivers having to manually figure out their schedule each morning, leaving customers waiting at home all day for a delivery.
British Royal Mail doesn’t offer the one-hour delivery window just yet – rather it notifies recipients up to 90 minutes before arrival time – but it has introduced innovative devices such as finger scanners that enable workers to pick-up and scan parcels more efficiently. As a result, an increasing proportion of the packages British Royal Mail handles are sorted by machine, labelled and tracked electronically.
In Germany, DHL has partnered with Daimler to create a completely new approach to the last mile. Starting in September, the ‘smart ready to drop’ prototype programme enables smart car owners to use their cars as mobile addresses for DHL deliveries. Car owner and DHL courier communicate using smartphones to identify the smart car as a mobile address, which the courier can then unlock and lock within a set period of time. This turns the car’s boot into a secure postal box, from which DHL can also pick-up returned shipments.
And Amazon? The company is already trialling the use of drones to drop-off purchases. The programme is still in development, but Amazon hopes within four to five years’ time the small, unmanned air vehicles will eventually deliver packages up to ten miles from its warehouses within half an hour.
Panasonic’s hardware expertise and software knowhow is increasingly creating new ways to drive efficiency in to the industry. From an intelligent warehouse solution which provides access to visual intelligence on the movement of parcels throughout a delivery hub, ensuring more packages are delivered on time. To rugged mobile solutions, which rationalise the multiple devices drivers require in order to carry out their daily delivery tasks.
Inch by inch, such intelligent technology solutions are making the ‘final mile’ shorter every day.