How Retailers Can Tackle The Last Mile Of Delivery

By Christine Kern, contributing writer

New research examines how data, driverless vehicles, and shared technologies will disrupt shipping.

As consumers’ expectations for fast shipping are intensifying, retailers and carriers must rethink the future of freight and address the challenge of the last mile delivery, when large shipments of goods atomize into thousands of individual deliveries. New research from Deloitte,  “The Future of Freight,” examines new market dynamics that are poised to disrupt shipping, and identifies four future delivery scenarios where data, driverless vehicles and shared technologies are poised to reshape every stage of a product’s journey.

According to Deloitte, there are four potential “future states” of the movement of goods:

•  State 1: Incremental change – Telematics and connected infrastructure technologies inform owners and operators but do not substantially guide decisions. Many customers still feel inconvenienced by the need to travel to a physical location to shop and pick up deliveries.
•  State 2: A world of digital insight – Leveraging Telematics, the IoT, and other digital technologies allows carriers greater flexibility in managing and deploying their assets in the last mile, though refusal to share this data means that the last mile still remains a challenge.
•  State 3: Rise of sharing and alternative vehicles – Driven by a proliferation of third-party options and ever-smaller and nimbler electric vehicles suited for urban areas, the last mile of delivery becomes extremely fragmented as the variety of assets employed and the diversity of their owners increases. Unorthodox methods such as bikes and drones make it easier and cheaper to expedite deliveries.
• State 4: A new age of integration – Customers have real-time access to the location and status of their goods through heightened data flows. Smart lockers are stationed throughout cities, all linked by a digital platform.

Deloitte also found that retailers are experiencing shifted shipping mixes, rebalancing the shipping portfolio with third parties rather than in-house deliveries; increased customer insights through digital touchpoints; enhanced visibility to shipments both internally and externally sourced; an increased need for distribution centers near urban centers to boost delivery speeds; and a proliferation of shipping options that allows for the ability to vary service levels.

And the pressure to meet those the last mile demands means that some companies are willing to experiment with just about any alternative options to improve delivery efficiency. In fact, some carriers in China are using bicycle teams to execute the last-mile travel for delivery.