How Has Covid-19 Impacted the Global Last-Mile Delivery Market, and How Can Your Company Adapt?
By Kelsea Mann
The COVID-19 Pandemic and subsequent quarantine period for most countries has significantly impacted market trends in ecommerce. A Staff and Bloomberg Report showed that “COVID-19 related shifts in buying behavior translated to an additional $41.54 billion in digital revenue for November-December. Additionally, 60% of shoppers surveyed as of February 16, 2021 said that new spikes in COVID 19 may keep them away from stores, as levels of uncomfortability in testing beauty products and trying on clothes in-store are also on the rise.
For the consumer in a post COVID-19 world, trends are predicting that online shopping will become the most preferable option. Retailers and suppliers are rapidly transitioning to accommodate online shoppers, which involves tackling logistics in the most challenging areas. One of these is the last mile, the short segment of a delivery which concludes with the consumer receiving the product. As e-commerce grows faster, the average consumer begins to wonder not “can I get that delivered?”, but instead “how soon can it get here?”
What Determines Last Mile Delivery Speeds?
In major cities across the US and Internationally, customers can get same-day delivery from grocers, restaurants, pharmacies and more. This drive in customer demand presents a massive challenge to all companies. However, last-mile delivery should be emphasized as it is the most memorable part of an online ordering experience on the customer’s end. Delivery speeds strongly depend on the proximity from user to supplier. Amazon, a pioneer in last-mile delivery solutions, has begun the process of shrinking regional distribution centers in order to access customers in large urban environments.
However, not everyone has the capability of Amazon. Many businesses are just beginning to use supply houses, rather than shipping from the store. While supply chain management has always been important to businesses, the need to improve shipping times changes it at every level. Picking accuracy in warehouses, for example, has been shown to be 99.9% accurate in a warehouse, compared to the less than 90% typically shown in store. The last mile may be the final step, but should be considered something of utmost importance. It is the culmination of the entire delivery process, waiting to be placed in the customer’s hands.
How Should Companies Adapt to These Changes?
About 83% of surveyed retailers are currently using UPS or FedEx for last-mile deliveries. While these can be an affordable option, significant growth has been shown in the Private Fleet sector. Even a few years before the pandemic, the transportation management systems industry was relatively small, with businesses heavily relying on parcel systems, or large fleets. According to a recent article from Forbes, “Coronavirus has changed the outlook for direct-to-consumer commerce, and TMS (transportation management systems) is now a critical component of this strategy. Last month at the Descartes evolution virtual conference, Chris Jones, the Executive Vice President at Descartes spoke on “Home Delivery Best Practices” for business. He identified four solutions that drive the customer experience; dynamic delivery appointment scheduling, same-day optimization, contactless delivery, and omni-channel home delivery.” See these terms clearly outlined by Mr. Jones here.
Companies with a smaller fleet, or numerous customers in different locations who are continuously requesting products, should consider private fleet and TMS service options to fulfill these needs. The COVID-19 Pandemic has tremendously increased the customer’s expectations for home delivery. While the last mile can be a costly area to transform, putting your customers at the forefront of decision making will always be the most logical business decision you can make.
