Last mile delivery in the Golden Quarter

Jim Sumner | Chairman Isotrak Group

The initial 2017 report of retail sales in volume and value terms, published by the Office for National Statistics, shows a 14% increase in online sales values when compared to 2016. This supports the large rise in popularity of online shopping, emphasised by manic discount retail periods such as the Golden Quarter – the period between Black Friday and the January Sales. It goes without saying that this naturally has implications for the ensuing home or office delivery.

In its latest Parcel Shipping Index, global technology company Pitney Bowes says that in 2016 parcel deliveries increased by 12% to £2.5 billion and spending increased by 8% to £10 billion on Black Friday alone. With no sign of slowing down, the huge upsurge in demand for ‘the last-mile delivery’, mainly over busy periods like Black Friday and the Golden Quarter, continues to test the capabilities of retailers and logistics businesses alike. Compounded by an equally increasing consumer demand for smaller, more precise delivery windows, how can this section of the transport industry address these real-time challenges and prepare for the online consumer of the future?

The present situation

Currently, telematics software solutions offer functionality to manage activities such as proof of delivery, client signature capture and real-time visual updates to confirm the exact delivery location of a parcel. Numerous software solutions encompass two components, for example a ‘front-facing’ mobile app for fleet drivers, allowing them to view the deliveries they need to undertake during their designated shift. Drivers can utilise the app to navigate to the destination, complete any workflow actions vital for that delivery, capture proof of successful distribution or exceptions upon an unsuccessful delivery.

The second component supports the back-end of delivery tasks, such as the customer service teams who receive and process the data captured by the drivers on the mobile app. This includes information such as accurate GPS for where the actions occurred, any signatures and images captured throughout the delivery, and the times that these events transpired. This allows for flawless communication to customers of where their deliveries were completed, by whom they were received and when.

Trials and prospects

Compliance

While advances in telematics has enabled fleet customers to operate more efficiently and transparently to the satisfaction of the end-consumer, from an environmental perspective the industry remains under pressure to further streamline operational efficiencies to reduce noise and air pollution, particularly in populated areas.

Unfortunately, the increase in the popularity of online shopping and the resultant home or office delivery has only exacerbated the problem. Data published last year by the World Health Organisation (WHO) says that more than 80% of people living in urban areas which monitor air pollution are exposed to air quality levels that exceed WHO limits.

Using electric vehicles, particularly in populated areas, would certainly be a viable solution. Tesla, which only recently launched its electric Semi truck, has already been given the green light by Walmart to pilot the new vehicle, as well as received an initial order from Canadian grocery giant Loblaws for the heavy duty all-electric transport trucks, despite the fact that initial pricing is not yet available.

Cost and efficiency

 The most costly portion of the total delivery cost to a business comes from the last mile – sometimes up to 30%. When combined with increased expectations in terms of on-demand delivery, the strain on a company’s budget is considerable if not passed on to the consumer.

Shared last-mile deliveries have been successfully tested and offer very attractive solutions not only for reducing costs, but also minimising unnecessary competition, duplication and the carbon footprint. It is a business model that can easily be applied in either a consumer or a B2B environment.

Future solutions

Drones and autonomous vehicles have been proposed as last-mile delivery solutions of the future, able to navigate through urban areas (albeit slowly for safety reasons), choose routes that avoid causing congestion, and deliver parcels when and were needed.  Drones that support on-demand delivery services would shorten delivery times, lower delivery costs, and align with consumer choice and flexibility.

Considering the rapid pace of technology these will eventually become reality. Already Mercedes has introduced its urban area concept van, a fully electric vehicle with automatic cargo space and on-board drones aimed at revolutionising last mile delivery. For now, businesses using telematics to be more operationally efficient and eliminate waste, as well as make fast, data-driven decisions to optimise driver and vehicle performance, will be ahead of the pack in the race for last-mile delivery success and consumer satisfaction.