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Great expectations: what consumer demands mean for final mile delivery

Those of us in the logistics industry know that,when it comes to parcel deliveries, expectations for quicker services is constantly increasing.

In 2016 industry experts predicted a rise in consumer demand for quicker and easier delivery solutions. The Consumer Expectations Study from IBM found that, when choosing whether to buy online, 72% of customers would consider the availability of two-day delivery to be an important factor in their purchasing decision. Research from global management consultants, McKinsey, also suggests that up to 30% of consumers are willing to pay premium prices for same day delivery.

To meet this growing demand for faster deliveries, retailers need to be able to manage ‘the last mile’. The last mile is how we describe the final stretch of a parcel’s journey – for example, the distance from a depot to a customer’s home. Logistics analysts, DC Velocity, recently reported that Amazon is planning to recruit up to 30,000 new independent drivers to support the company in its last mile services.

A recent survey by Convey, a company that helps businesses with shipping and delivery, shows that around 600 out of 1,500 shoppers think delivery times are the most important part of their shopping experience. We’ve seen a number of changes taking place within the industry with the aim of improving last mile delivery.

Here are a few examples:

Tracking options

E-commerce companies have started using new technologies to increase package tracking options throughout the delivery process, particularly during the last mile. Smart phones have had a huge effect on how delivery companies communicate with their customers. By integrating technology for tracking packages, consumers can trace their parcel every step of the way and receive live status updates. This access to real-time information has quickly become the standard in the industry and the technology looks to improve over the coming years.

Dealing with the urban population

Some 74% of Europe’s population currently lives in urban areas so, coupled with the increased demand for faster deliveries, there’s been a rise in urban warehouses being built. By cutting the distance of travel between the holding facility and the drop off point, this allows companies to deliver quickly within a small area.

Environmental factors

Building additional urban warehouses does raise concerns of cities becoming more congested, as result of extra petrol and diesel delivery vehicles being on the roads. To combat this there has been a push for delivery companies to become more environmentally conscious. For example, we’re seeing a return to a more traditional way of getting around like the good old-fashioned two-wheeler. Cargo bikes are currently being trialled on the streets of London, and I see no reason why the delivery of larger parcels and packages via this method shouldn’t enjoy the same success. Food delivery services have been using bikes to get their goods from ‘A to B’ for some time now.

Technology

It’s interesting how the use of both cutting-edge technology and more traditional methods are being employed in last mile logistics. The technology behind self-driving cars, drones and robots has already made significant technological advances in 2017. JustEat has delivered more than 1,000 meals through its fleet of 10 robots in London and courier service company, Hermes, is testing its ‘Starship’ robot delivery buggies. It is hinted that the UK Government could be investing in technologies like driverless cars, so I feel confident in saying that deliveries via robots and electric vehicles are likely to become much more commonplace very soon.

These changes are all positive steps for the industry. It will be interesting to see what 2018 holds for last mile logistics, and how customers will react to these evolving methods of delivery.

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