Published Tuesday 21st May 2019
The distribution industry is continually evolving, but right now, it is entering a period of noticeable change. Led by environmental concerns and the increasing demands of e-commerce, logistics and delivery companies are forced to constantly think forward as pressures from all sides demand more efficiency throughout the process.
These recent developments have led last-mile delivery to become a sizeable industry in itself. It is one of the most important parts of any successful delivery, both in terms of productivity and service. It is also an area that will see many technological improvements over the next few years.
The Last Mile Delivery Puzzle
When used as part of the supply chain model, ‘last mile delivery’ can mean different things depending on the scenario. As a general phrase, it often concerns the movement of goods from an order processing location (e.g. warehouse) to the final destination (e.g. a home). However, in recent discussions, it has widely concerned the specific issue of deliveries in a heavily-urbanised location, such as a city.
Delivering goods to customers in built-up areas has been a problem for generations. However, it is an issue that has become increasingly prevalent over the last decade. As with many of the inefficiencies concerning distribution, such as wasted space, the evolution of e-commerce has had a significant impact. Online shopping, led by Amazon, has set new standards for the consumer experience regarding speed and simplicity that all businesses are expected to match. This expectation creates issues for the delivery of goods, as companies are expected to deliver their products without delay or risk losing their ever-demanding consumer base.
The other primary issue heightening the importance of last-mile delivery is the environment. Growing discussions around climate change are leading to increased public demand for environmentally-friendly spaces, particularly in cities. A recent example of this is London’s new Ultra Low Emissions Zone, designed to reduce the number of environmentally-inefficient vehicles operating in the city’s centre. Given the recent publicity, it is likely that eco-consumers could shape the distribution sector over the short and medium-term. In the broader environmental debate, cities have to lead the way, and inefficient delivery practices are likely to be targeted as a result.
Urban Technology Solutions for Modern Distribution
Both of the aforementioned concerns gravitate around the crux of the last mile puzzle, which is congestion. Large delivery vehicles driving around major cities trying to deliver parcels at speed creates inefficiencies and, ultimately, excess traffic. Congestion is bad for the environment and also for the operating costs of the distributor, meaning that both city administrators and businesses are on the same side of the concern.
The most prominent development in the last mile logistics issue has been the inclusion of electric vehicles. Widely available and highly reliable, the majority of city businesses can operate completely electric fleets without creating excess costs. An example of this is DPD, the global delivery group who in 2018 opened a Westminster micro-depot in the heart of London that provides fully-electric last mile deliveries.
However, electric vehicles themselves don’t solve the pivotal issue of congestion. This need to reduce traffic is why many of the recent innovations in last-mile delivery have concerned alternative delivery systems. These can range from small LCVs designed for quick deliveries, all the way to the latest autonomous delivery vehicles (ADVs). As technology progresses, many industry thinkers expect these ADVs to become the primary method of last mile delivery in urban spaces. ADVs are also creating a very competitive marketplace, where new tech companies can challenge established couriers in a relatively new landscape.
Reducing the Cost of Business Distribution
These new technologies will help to revolutionise urban delivery, creating more opportunities for efficient business practices. When combined with continuing customer demand and price sensitivity, these developments should lead to reduced delivery expenses, both for consumers and businesses.
Here at Expense Reduction Analysts, we’re experts at helping businesses reduce distribution costs. Our specialists have years of experience in the industry and will work with your business to achieve long-term cost savings. These technologies could be opening up new expense-reducing opportunities for your business. So, if you’re looking to unlock some capital, why not speak to our team today and see what savings we could create for you?