Visibility and reliable technology implementation solve inefficiencies in on-demand and same-day delivery, says Salman Habib, co-founder and chief executive officer of Burq.
Because last-mile delivery is customer-facing and, unlike “middle mile,” doesn’t operate in a controlled environment, it’s extremely difficult to get right, Habib says. As customers have grown to demand not only reliability of drivers but visibility into delivery windows, “that really makes it very challenging for retailers to get last mile right.”
One of the biggest decisions retailers must make is whether to hire their own drivers. “That is a very complex and arduous process for any retailer to go through,” Habib says. “You have the cost of driver churn. You have the cost of driver management, driver retention. You have the issues around what we're recently seeing with high fuel costs. A lot of businesses are opting out of that solution. They're finally realizing this is perhaps not best for their unit economics. That's the major inefficiency we see with retailers offering on-demand and same-day last-mile delivery.”
So are outsourced fleets the answer? “I must agree that it's a more ideal situation,” Habib says. “You don't have to hire your own drivers. You don't have to manage your own fleet. You get broader geographic coverage. But even then, there are a lot of challenges around how you ensure quality when you don't own the drivers?”
The answer lies in software that essentially aggregates and consolidates multiple delivery providers. “You have this bird’s-eye view around who's performing the best, who has the best rates. You can optimize for speed, you can optimize for price, you can optimize for reliability. And that's one of the more essential ways that retailers can tap into to ensure that they're de-risking this very specific approach to utilizing third-party providers,” Habib says.
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