The last mile has been a buzz word of the supply chain industry for a long time. Also known as the final leg or final mile, the last mile is part of the journey parcel takes between its last touch point and its final destination. Historically the last mile has been dominated by the United States Postal Service (USPS) with over 156 million delivery points nationwide in 2017. While UPS and FedEx stand ahead of the pack as national leaders in the digital age of parcel transportation, innovation in last mile opens new opportunities.
What’s the rush? It all started when select manufacturers and retailers offered free ground delivery over a purchased dollar amount. Years after Amazon releases Prime 2Day free delivery with membership. Today companies are offering free same day services.
Why is the last mile such a popular topic right now? A quick search on Google reveals dozens of recent blog posts on the subject, and different logistics companies offering their services to fix the last mile. Perhaps supply chain data analysis is responsible for the upward trend. Within the last few years, multiple reports have been published stating how expensive the final part of the journey costs companies, growing to become a large percentage of total order fulfillment costs.
The sky is falling! Nope, it’s your last leg delivery. Large e-commerce giants and major parcel carriers are using resources and forming strategic partnerships to invent innovative practices. Most folks have heard about or read articles concerning drone usage for the last mile the past couple years, and it’s not a bunch of rumors. In April 2016 the U.S. Senate passed the FAA act (Federal Aviation Administrative Reauthorization Act) – approving drones to deliver packages. Aviationairportdevelopmentlaw.com states the act ‘devotes substantial additional space to UAS (Unmanned Aircraft Systems).’ The passing of this act gives the Secretary of Transportation two years to provide a final authorization to use drones for property transportation, so stay tuned everyone. FedEx however, is working to develop autonomous cars for delivery, believing drones have limits including a small weight carrying capacity and route restrictions caused by FAA regulations.
Where to stash the package upon delivery? Unlocked apartment building lobbies and unsecured mail rooms can accumulate vast piles of delivered parcel and potential theft during the week. Lockers are an option to ensure space and security when having orders delivered. Amazon offers lockers at select Whole Foods and shopping malls. The Ship & Get from FedEx and UPS Access Point are small centers placed in facilities including grocery stores and shopping centers, where customers can reroute their package for pick up. FedEx Office and UPS stores offer in-store pickup. How to tackle that large apartment complex issue? Amazon offers the Amazon Hub – a smaller version of their locker system but only good for amazon deliveries. Rather than sitting in traffic and burning fuel on multiple deliveries, consolidated drop off points save gas mileage and other delivery costs for the carriers. Many retailers offer free in-store pickup for online ordering with same and next day options. Benefits include not having to pay shipping costs, immediate availability, and saving time if the store is on your travel route.
Need it delivered today? No surprise to see Peapod, Amazon Fresh, and Amazon Now offering same day services. Walmart recently purchased Parcel – a NYC based delivery company to service the greater New York City metropolitan area for same day delivery. While Target is offering same day delivery for in-store purchases in a few NYC locations.
Tailored delivery options? Consumers are increasing the number of products they purchase online each year. Businesses can sign up on rush.uber.com for Uber drivers to deliver customer orders. The system shows a live delivery route on an interactive map, so the store knows when the customer has received their order. Local courier and regional carriers are uniting in technology partnerships to streamline competitive delivery options with in-home and white glove services.
Not home to accept your final mile delivery? The race is on to see what future innovations increase efficiency, lower costs, and reduce delivery times. Soon there is the possibility of parcels delivered directly to your car or inside your home. USA Today recently posted an article about Amazon partnering with a manufacturer of smart license plate holders with a secret trap door to hold house or car keys. While another manufacturer of car key-fob technology is under development to allow carrier diad boards (the device you sign your name when accepting a delivery) ability to open the door or trunk of your car. A similar smart doorbell device would allow one-time access to in-home delivery while under live video stream surveillance to your phone.
What’s in it for the carriers? If your parcel delivery was late, damaged, or stolen, a poor experience with a carrier will not only result in lost business for them but also lost revenue for the retailer. As we have discussed, there are several options for parcel last mile delivery already here and on the horizon. It is a very exciting time to be in the supply chain last mile arena both as a service provider and as a consumer.
What’s the next new idea being delivered on its final mile right now? If you know, please drop me a note. I would love to hear about it.
This article was originally published on LinkedIn: http://bit.ly/2Hkgdek
Robert Endo is the founder and Engagement Manager of Intrepid Data.
Intrepid Data is a full-service developer that builds platforms for web-based applications