Many recent articles were focused on technology and the transforming face of delivery. Every paragraph, polished in a lyrical manner about the ways consumers were eventually beginning to accept fresh forms of delivery, such as autonomous vehicles, drones; and squabble that robotic drivers no longer a TV screen tale, soon enough these science fiction wonders would become a reality.
So before you speculate and click to read an apparently more practical article, let’s have a look at this in some more facts. The technological advancements are the key to logistics and parcel delivery industry. Even the best in the business, already established in techniques, are motivated for more technological improvements.
With this in mind what does the coming days look like for the last Mile?
The Last Mile
For parcel delivery, at present, a significant disruption is caused by the last mile. The total cost of global parcel delivery, excluding line-haul, sorting and pick-up amounts to Euro 70bn (USD86bn). But, the market apart from being dynamic is also not huge. The market growth rates, in recent years, are ranging between 7 percent to 10 percent in mature markets such are Europe and the USA, and almost 300 percent in developing markets like India. The data indicate that the mature markets could double over the next 10 years, achieving roughly 25 billion parcels every year in some North American and European territories.
Unsurprisingly, the largest driving force to this growth is e-commerce, which has budged market share from B2B to the B2C segment. Once, B2C made up 40 percent of the market, however, it has since exceeded 50 percent in several countries in Europe. Additionally, the last mile’s huge share in total parcel delivery price, habitually touching or exceeding 50 percent mark, makes it a key consideration for those seeking to acquire a competitive advantage. At the same time, it is accurately at the last mile that plenty of retailers are struggling, as they often bear considerable labor cost disadvantages and therefore, all else being equivalent, competitive disadvantage.
Big Changes are just around the corner
As mentioned before, the rise of e-commerce has shifted the consumer preference to being the center of attention in what was earlier a very business-orientated parcel delivery market. The huge e-commerce players along various fresh startups, now see the last mile services as a major differentiator from their competitors.
Indeed, the a varied delivery options and the seeming quality of the parcel service are key decision criteria for online customers and thus in a straight line impact e-commerce players’ success in the marketplace. Consequently, all logistics, supply chain is laboring hard to bring customers with the best possible experience, especially when it comes to improving delivery times.
As predicted, by Matthew Robertson, co-CEO, NetDespatch, in the span of the next 10 years, AGV’s(autonomous ground vehicles) and parcel lockers will swap roles from present forms of regular parcel delivery and this is basically due to cost advantages. Many interesting researches conducted recently also indicates that the companies could see a drop up to 40 percent in cost over today’s conventional last-mile delivery–especially in rural areas, but also in urban areas, with the launch of automated delivery.
To highlight the scale involved, a 40 percent saving on delivery costs would render into a 15 percent to 20 percent point boost in profit margin, or provided that rate is often the crucial decision criteria in the market segment a 15 percent to 20 percent cut in prices. With wages likely to continue to increase, the benefit of autonomous delivery forms will grow further.
Barriers to automated delivery success
The wide spread of automated is challenging, especially with regards to public opinion and acceptance of new technologies. Provided that a lot of drivers already accept a considerable amount of driver support systems in current delivery vehicles, they range from speed and distance control as well as automated steering in the form of lane assistant, it is difficult to envisage that the consumers will oppose outright to autonomous vehicles.
Furthermore, many big automobile and technology companies are already investing in bulk in these kind of technology; naturally they will leave no stone unturned to convince the public of the benefits of their products and their superior safety in particular.
It is safe to say that love it or detest it, the revolution of automated parcel delivery will soon change the face of the last mile and what once was recognized as a science fiction dream will soon become reality.