7 Last Mile Logistics Delivery & Ecommerce Trends You Don’t Want to Overlook

7 of the Latest & Greatest Last-Mile Delivery Trends

1. The Gig Economy & Crowdsourcing

Venture capitalist startups such as Uber, Airbnb, and TaskRabbit have changed the labor market as we know it, contributing to the rise of the gig economy - and they’re coming for last-mile delivery, next. From Amazon Flex to Postmates to Roadie, a growing number of business units and companies have cropped up that provide crowdsourced delivery services.

“Crowdsourced delivery was not possible 10 or 15 years ago,” said Ingrid Bekkers, VP of Marketing at Deliv, a crowdsourced same-day delivery startup. Unfortunately, Deliv announced it was shutting down and Target Corporation announced plans to acquire Deliv's technology assets.

“There has been a profound technology shift for drivers. Today, everyone has a GPS computer in their pocket. With that, you can mobilize a disparate workforce of delivery drivers by a whole host of factors, chief among them is where they are.”

And it’s easy to understand the appeal: A crowdsourced delivery model can drastically reduce retailers’ out-of-pocket shipping costs, customers have the flexibility to schedule deliveries based on their availability, and GPS and/or telematics devices allow for real-time traceability.

That said, crowdsourcing last-mile delivery isn’t without its challenges. Though it’s really taken off in urban centers, where couriers on bicycles have an easier time navigating narrow, congested streets than traditional delivery vehicles, it has yet to see that same rate of adoption in rural areas. Additionally, there’s the concern that retailers have less oversight with crowdsourcing than they would with traditional delivery methods, meaning there’s greater potential for inefficiency.

2. Smart Technology for Tracking

Transparency and traceability are major concerns for retailers and consumers alike, but letting customers know the current status of their order and whether a package is en route to its final destination are just table stakes. What if you could tell customers the exact location of an item in transit with pinpoint accuracy? Even better - what if you could tell customers the exact environmental conditions in which their package is being delivered?

With smart technology, you can. From using GPS and RFID tags to track the movement of shipments in real-time to embedding IoT-enabled sensors in packages in order to monitor their temperature and humidity, smart technology has enabled retailers to provide their customer base with the transparency and traceability they desire. And smart technology isn’t limited strictly to consumers tracking in-progress shipments - retailers can even leverage it to monitor weather patterns and plot delivery routes in order to ensure that packages arrive at their final destination on time and in pristine condition.

3. Robotic Delivery

Of the various expenses associated with last-mile delivery, labor is the highest, accounting for an estimated 60% of costs. And when it comes to labor, the cost isn’t the only limiting factor - there’s also the matter of availability and schedule to consider. For these and other reasons, a growing segment of retailers is starting to experiment with robotic delivery in the form of self-driving vehicles, drones, and autonomous delivery bots.

Though this technology is still largely untested and unproven, it appears to be the way of the future, especially in a post-COVID-19 world. Just ask Amazon, which recently invested $530 million in the self-driving car company, Aurora. According to one Amazon spokesperson, “Autonomous technology has the potential to help make the jobs of our employees and partners safer and more productive, whether it’s in a fulfillment center or on the road, and we’re excited about the possibilities.” And as we all know, where Amazon goes, others will follow.

4. Rapid Order Fulfillment

Speaking of Amazon, the eCommerce behemoth is often credited for kickstarting the rapid order fulfillment revolution with its two-day (now one-day or same-day) Prime delivery. Although most businesses can’t afford to shell out the same amount of coin as Amazon to support this level of rapid order fulfillment - the company reportedly spends billions on shipping - it’s imperative that you make every effort to winnow down your last-mile delivery window in order to meet rising customer expectations. One efficient way to do this is to partner with a third-party logistics (3PL) provider that leverages a warehouse management system to optimize the order fulfillment process.

5. Urban Warehouses

The acceleration of eCommerce and the growing demand for rapid order fulfillment has also prompted a shift in the way retailers approach warehousing. Following in the footsteps of major players like Walmart, Target, and IKEA, a growing number of businesses are exploring the possibility of urban warehousing.

Read: How Does IKEA’s Inventory Management Supply Chain Strategy Really Work?

The idea is simple: The closer a fulfillment center is to the end consumer, the easier it is to reduce delivery lead time. Given the fact that the vast majority of consumers live in or around major metropolitan areas, building a warehouse within city limits can be a practical way to expedite final-mile logistics and fulfill same-day orders.

Another major benefit of urban warehousing is that it provides retailers with closer access to pools of labor. Like consumers, many warehouse employees live in or around city centers; rather than requiring those workers to drive out to suburban areas, urban warehouses bring work closer to home. This is even better for workers who do not own their own cars and would otherwise be dependent on public transit.

Urban warehouses are currently a hot commodity in short supply, however, a growing number of real estate developers are turning their attention to this expanding market. Innovo Property Group is one such firm, having recently broken ground on a one million square foot, two-story Class A logistics, and distribution facility in the Bronx.

“What’s interesting is that because of the confluence of factors - the demographic trend to live in cities, the smartphone, shorter delivery time frame requirements, and the advent of a shared services new economy, which focus on capacity utilization to drive down costs - has created a need for a totally new sector in real estate, which is the urban warehouse,” said Andrew Chung, Founder & CEO of Innovo.

“In addition to addressing shorter delivery times, [these facilities] can also accommodate multiple needs for the retailer.”

As the saying goes, “If you build it, they will come.” That’s certainly the hope of industrial developers and, given the last-mile delivery opportunities that urban warehouses present, it’s likely to come true. That said, new developments aren’t the only answer to the demand for urban warehousing: Major retailers are starting to explore the option of transitioning vacant storefronts in shopping malls into fulfillment centers.

6. Insourcing Deliveries

Rather than outsource last-mile delivery, some retailers have instead opted to handle everything internally, relying on their own fleet of vehicles or a hybrid fleet to fulfill orders. Although outsourcing remains the order of the day, some retailers have even chosen to co-op with competitors in their region to share assets and reduce final-mile logistics costs. This trend has inspired some 3PL providers to develop their own local delivery services to compete with insourcing, with vehicles and technicians on-hand for local deliveries.

7. Hybrid Fleet Management Systems

As mentioned, some retailers have adopted a hybrid fleet model - that is, a combination of a trucking company's own fleet, paired with contractors, third-party providers, and freelance drivers - in order to scale fleet size in accordance with changes in demand. A hybrid fleet model offers greater flexibility and affordability than the traditional model. If aligned correctly with your fleet operator, there are even more opportunities to create value-added synergies within your supply chain, including optimizing deliveries within your entire network, mitigating deadhead miles with empty trucks, and even introducing the potential to broker your truck capacity in certain lanes.

A hybrid fleet strategy requires a fleet management system capable of enabling efficient transportation execution. Similar to traditional fleet management systems, which enable businesses to gain insight and analytics into vehicle and technician performance, a hybrid fleet management system provides you with a centralized dashboard from which you can optimize routing, monitor vehicle location, receive delivery updates and weather alerts, access historical reports and more, all in real-time. With a hybrid fleet management system, you get the best of both worlds in terms of both scalability and control, making it one of the leading trends for last-mile delivery today.

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