E-commerce growth has placed more pressure on supply chain and logistics managers to build out last-mile delivery. Without it, retailers are at a competitive disadvantage, but many are still struggling to get it right.
While some talk about the “Amazonification” of business and a so-called “retail apocalypse,” e-commerce organizations, retailers and other businesses continue to thrive, and the reason for their success is often not glamorous. Success depends on a good product mix, effective marketing and appropriate pricing, but more than anything, it is dependent on getting products into the customer’s home quickly and affordably. The cornerstone of retail success today is the last mile.
Delivery of everything from living room furniture to small parcels and everyday groceries is expected, and customers want it fast. To meet that customer need, businesses must adapt, and traditional shipping methods are no longer adequate.
Last mile starts with a realistic look at where those last-mile carriers originate their shipments. Successful organizations are building out their last-mile capabilities by shrinking the middle-mile, moving distribution centers closer to customer populations, and using predictive analytics to ensure the SKUs in those centers are correctly associated with the nearest population centers, sometimes using the retail stores themselves as de facto distribution centers as they build out a more holistic ecosystem around e-commerce.
Gaining last-mile competitiveness also requires greater transparency of the entire supply chain, a platform that is readily scalable and diverse enough to accommodate small parcels, while also accommodating deliveries that may require specialized licenses or larger vehicles. Finding the closest driver is not enough to be competitive — rather, last-mile success depends on more precisely matching each delivery with the best and most appropriate vehicle and driver and best, optimized route.
Crowdsourced Delivery Model
Most solutions focus on the last mile exclusively with an Uber-like crowdsourced driver network, which solves only part of the problem. Effective last-mile delivery relies on several factors, beginning with precision matching that takes into account all delivery requirements, including pre-scheduling and on-demand, routing with multiple stops, small parcel or large items, and specialized requirements, such as a two-person team, HIPAA licensing or a TSA license for airport pickups or endless other variations.
To accommodate these requirements, businesses need access to a readily-available and highly scalable multimodal delivery network, built on an intelligent platform that matches each shipment to the most appropriate driver, vehicle and delivery route. This has proven challenging, as much of the nation’s shipping ecosystem is made up of a disorganized, fragmented and non-standard delivery universe.
In building a smart platform capable of serving companies of all sizes, a driver-centric model is also essential. Retailers and other companies need the technology, but they also need to have reliability and a “preferred driver” program — and that comes with a platform which pays attention to the culture, provides drivers with adequate pay, repeatable and predictable work, and direct contact with actual people on the other end. A more driver-centric platform, besides unifying a previously fragmented universe, provides companies with better performance, while also providing the drivers themselves with a much more successful and profitable platform for offering their services.
The solution is a smart, cloud-enabled platform that unifies this fragmented universe, which can be reached by any member of the supply chain at any time, with immediate access to precise delivery criteria. With an ecosystem based on smart platforms, specific requirements can be fed into the platform, and the most appropriate delivery person, vehicle, licensing, and route can be instantly calculated and sent to the correct destination, at the most advantageous cost to both the business and its customers.
Tom Fiorita is founder and CEO of Point Pickup.
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