The latest advances in technology are having a huge impact on the world we live in, transforming industries like taxi services, food and grocery delivery, and music almost overnight. Sometimes this change is happening so quickly that it’s hard to even comprehend the growing expectations and what’s happening for both businesses and consumers.
While many of these growing expectations have been positive, and have created a more efficient, faster-paced world (can you imagine a world without Uber?), there are many that stretch too far without considering the realities of the industry they’re hectic about to establish.
The delivery landscape of the last mile
One of the business areas that technology is beginning to make its way into is the last mile delivery business. In logistics, last mile delivery is defined as the movement of goods from a transportation hub to the final destination.
Typically, this destination would be a private residence or a business and last mile delivery would be provided by the major shipping service providers such as UPS, FedEx or USPS. Other options include third party logistics companies or 3PLs employing and/or subcontracting their own fleets to fulfill corporate orders.
With e-commerce sales increasing annually, consumers now have the option to choose between different retailers to purchase the goods they want. In response, many online retailers are in fierce competition with each other to offer their customers the fastest, most reliable order processing. This movement has been spearheaded by industry giant Amazon, which continues to grow each year and establish an online stronghold that promises two-day deliveries for a large portion of its goods.
startups and applications
The growing expectation of getting goods to the consumer as quickly as possible has unsurprisingly caused a stir in the world of last mile logistics. To address this problem, many startups and tech companies have attempted to provide “magic” solutions for retailers, logistics companies, and restaurants alike.
The revolution in on-demand delivery service has had far-reaching implications, to say the least, from B2B services that offer last-mile delivery to apps that allow consumers to order anything they want and to have it delivered right to their doorstep.
Many of these startups and smartphone applications have primarily focused on the delivery of on-demand items to consumers, such as food and beverages from restaurants and items from convenience stores, grocery stores, and brick-and-mortar retail stores. Apps like Postmates have had some success with their model, leveraging their operations in major metropolitan areas with a fleet of contractors on hand for delivery. However, others such as UberRush have recently closed due to an unsustainable business model.
While Uber and Postmates primarily provide services for customers who want groceries or convenience store items delivered right to their door, both Uber and Postmates have been busy building side businesses, the companies that operate in major metropolitan areas like New York want to deliver, offer last mile delivery options , San Francisco and Chicago.
speed bumps and roadblocks
The ability of mail carriers to access a fleet of contractor delivery drivers in these areas has disrupted the usual logistics model for last-mile logistics, which traditionally relies on trained delivery drivers and staff to fulfill orders. While this new model promises lower overheads and greater flexibility in the short term, it often falls short in the long term due to issues ranging from unsustainable prices to unreliable service levels and operations.
One of the prime examples of the difficulties faced by many startups trying to break into the logistics industry is the recent failure of Shyp. Shyp was a promising startup a few years ago that offered hassle-free shipping for people who didn’t want to pack and ship an item themselves.
Before the closure, they had started to shift from individual customers to offering shipping options to businesses. However, the initially established price structure had proven to be unsustainable. When they tried to build a more business-oriented shipping service, they lost faith in the company and closed their operations.
Another Uber offering, Uber Freight, is still chugging along but struggling with similar issues to other logistics startups like Shyp. The problem with many of these new delivery services is that they offer untrustworthy and inconsistently vetted and/or trained contract carriers to transport valuable supplies.
Growing expectations in conclusion
While they may not offer the fast delivery promises of these new startups, established carriers with strong industry reputations still have a long way to go. By hiring a trusted company, you can count on drivers with good records, experience transporting certain types of goods – like frozen or chilled items – and insurance and warranties to cover any problems that may arise.
What we will see in the future is unclear – but with companies looking to break into the last mile logistics market, a lot more is sure to change. Just last year, Walmart acquired Parcel, a last-mile delivery service in New York City, and across the country, Amazon continues to increase its hold on the industry, trying to expedite order processing wherever it can while extending its services to others company outsources.
While startups will continue to innovate in this space, traditional logistics companies with the knowledge and expertise to provide consistently safe and reliable deliveries at a fair and reasonable price remain the gold standard in the industry and will remain so for the foreseeable future .
Regardless of who wants to offer the last mile delivery service, it must be consistent, competitive and timely. Otherwise, customers will switch to another service provider at lightning speed when their expectations increase!
About the author
Michael S. Kraus Chairman CEO of https://expaklogistics.com/. Our deep-rooted expertise and quality standards make Expak Logistics the number one choice for companies seeking cost-effective, flexible and simplified solutions to their distribution and supply chain needs.