21 Mar From Robots to Crowdsourcing: 6 Top Trends in Last Mile Delivery
Final mile delivery: for many companies, it’s the most expensive and challenging aspect of getting goods to consumers. Referring to the last stretch of delivery — from a transportation hub or warehouse to the final destination — various logistical issues make last mile delivery a challenge.
Navigating customer expectations, logistical route issues, and massive changes in technology create a last mile delivery ecosystem that’s fraught with challenges. At the same time, exciting new trends dictate a future that promises to be more streamlined, efficient, and customer-centric than ever before. Let’s take a closer look at the newest trends in last mile delivery.
What Drives Trends in Last Mile Delivery?
- Customer Expectation. In our constantly evolving on-demand economy, it’s no surprise that customers demand faster, more efficient deliveries — but expect low shipping prices. Speedy, cost-effective delivery is quickly becoming non-negotiable for consumers.
- Cost. Historically, last mile delivery costs have comprised a substantial portion of overall shipping costs, with Business Insider claiming last mile delivery accounts for 53% of the total cost of transportation. Trends in last mile delivery are driven to address inefficiencies that lead to higher costs for an already expensive aspect of shipping.
- Logistics. Last mile delivery seeks to efficiently deliver products to the consumer, wherever that consumer may be. This means that drivers are sometimes forced to traverse crowded, narrow city streets where they face challenges based on urban infrastructure and traffic. On the other side of the spectrum, drivers delivering to rural areas drive long, inefficient distances between low-density stops.
- Technology. As innovations in technology change the way we shop and interact with the world, more and more consumers expect to-the-minute information: text updates on order status, real-time tracking, and greater interaction with shipping data.
- Explosive growth. E-commerce is continuously expanding. According to Statista, retail e-commerce sales are projected to reach 4.88 trillion by 2021 worldwide. Last mile delivery has to keep up with increased demand in online retail orders.
The Newest Trends in Final Mile Delivery
Though it’s hard to narrow down just a few trends in a field that’s subject to so much change and advancement we’ve compiled six of the top trends in final mile delivery. In many cases, these trends have already caught on within some companies — or soon will.
1. Warehouses in Urban Settings
In the past, it just made sense to establish warehouses in the suburbs — the cost of rent is lower, and there’s more space for a large building. However, improved final mile delivery demands that warehouses shift to urban settings. Demographically, it makes sense: around 80% of Americans and Canadians live in urban settings.
With this in mind — coupled with consumers’ push for quicker, more on-demand service — it follows that urban warehouses could resolve many pain points in the supply chain: the convenient location can help reduce the cost of holding inventory, get products to consumers quicker, and even cut down on toll and gas costs.
2. Crowdsourcing Technology for Delivery
Consumers are already making use of crowdsourcing apps for same-day delivery of food and grocery purchases — and other parcels are soon to follow suit. Already, Amazon’s PrimeNow services make use of a flexible labor force to get their deliveries out quickly and efficiently.
And the trend for crowdsourced technology extends beyond the major players in delivery. Innovative companies like PigeonShip use a team of independent drivers who do same-day deliveries for customers in their area. In addition to getting packages to consumers quicker, independent drivers can navigate crowded urban spaces that present challenges for trucks.
3. Customer Tracking of Delivery
Customers want control over their deliveries. As more and more people make the majority of their purchases online, it’s pivotal for customers to track and organize all of their expected deliveries. Since people are spending more time on their smartphones, that information must be readily-available via text and email status updates. That’s where tracking technology comes in.
A new trend in last mile delivery, real-time tracking for customers simply means that consumers get a real-time glimpse at the status of their package’s final mile of delivery. As a whole, customer tracking offers several advantages: improved customer satisfaction, better overall communication in the supply chain, and increased incentive to make speedy deliveries.
4. Robots, Autonomous Vehicles, and Drones
Big name companies like Amazon and UPS have begun experimenting with autonomous or robotic methods of solving the last mile problem — and the trend is catching on. In fact, McKinsey predicts that autonomous vehicles will handle 80% of all parcel deliveries within the next ten years.
Already, several start-ups are seeking to change the game in robotic delivery. One of these, Dispatch, is creating a fleet of autonomous vehicles that are designed to navigate sidewalks with pedestrians. As another example, Kiwi Campus designs bots to deliver food on the Berkeley, California campus (and beyond). Drone technology is poised to make rural deliveries in far-flung locations far more energy, time, and cost-efficient.
There is one important caveat to this prediction. Although autonomous vehicles and drones are taking last mile delivery by storm, McKinsey also predicts that 20% of deliveries will still be delivered via conventional means in the near future, especially in the B2B sphere.
5. Zero Emission Transport Modes
Recently, IKEA Group made the commitment to transition to 100% zero emissions in home deliveries in five cities by 2020. This announcement comes on the heals of a global push towards reducing carbon emissions across industries, transportation included. Noise, pollution, emissions, and urban crowding all make the case for transportation modes with a smaller footprint. These zero emission transport modes could take the form of:
- Electronic vehicles
- Bicycle couriers
- Zero emission freights or barges
- Autonomous vehicles and AI
This shift towards zero transmission transport modes in last mile delivery represents a challenging yet exciting shift in worldwide emissions standards — and should change final mile delivery for the better.
6. Technological Advancements
To improve efficiency in the supply chain, companies need to emphasize the role of technological advancements. Technology that enables companies to gather and analyze data at any point in the supply chain — and especially the final mile — will soon become standard.
For example, “smart sensors” built into products helps give supervisors a greater insight into which products are in high demand, whether inventory is staying up to demand, and even help plan more efficient and safer driving routes.
In general, more efficient final mile delivery demands that companies use analytics to monitor and analyze data about shipments. This includes gathering data on fuel consumption, the temperature of the goods being delivered, and inventory levels. In addition, digitally tracking route optimization can help companies offer more efficient services — even in difficult-to-service urban or rural areas.
Last Mile Delivery in Ottawa
At Ottawa Logistics, we strive to use current technology so that we can deliver efficient and cost-effective service. We’re proud to offer cross dock and final mile delivery services in the Ottawa Gatineau area.
For cross dock and final mile delivery services in the Ottawa Gatineau area, please reach out to us today.