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In the realm of last-mile delivery automation, discussions often veer into the realm of wishful thinking and fantastical predictions of self-delivering robots and drone takeovers. While it's intriguing to speculate on what the future holds, it's crucial to differentiate between realistic predictions that inform strategy and far-fetched theories for mere amusement. At Ondway, we believe in practical automation solutions that enhance efficiency, reduce costs, and maximize profits, rather than chasing a utopian vision.
To envision the future of the last mile and harness the power of automation, we must first evaluate current automation solutions, assess their effectiveness, and identify realistic advancements on the horizon in the coming years.
Parcel Lockers: Automating Out-of-Home Delivery
Parcel lockers represent an automated alternative to traditional pick-up and drop-off (PUDO) points, delivering immediate benefits. With their 24/7 availability, customers enjoy the convenience of collecting parcels at their preferred time. These self-service lockers not only save time but also handle returns and customer-to-customer sends, meeting the growing demand for flexible options. Additionally, they optimize route efficiency and contribute to long-term sustainability by consolidating parcels for carriers.
While parcel lockers have gained popularity, they won't completely replace traditional PUDO locations. Lockers come with higher costs compared to PUDO points situated in convenient, high-traffic areas such as convenience stores. Expanding network density is often more feasible and cost-effective by adding new PUDO locations. A combination of lockers and PUDO points offers customers the freedom to choose their preferred delivery option, ensuring an exceptional delivery experience.
Route Planning: The Backbone of Efficiency
Efficient route planning is a critical aspect of last-mile automation. By optimizing routes, carriers can achieve more deliveries in fewer miles, leading to improved efficiency, reduced costs, and lower CO2 emissions, promoting long-term sustainability.
The next phase of automation in route planning involves calculating the probability of successful deliveries for each stop and incorporating real-time updates to redirect deliveries to out-of-home locations. To achieve this, carriers need access to smarter consumer behavior data that reveals insights into optimal delivery times, successful delivery patterns, and failed delivery attempts. By leveraging this information, carriers can proactively redirect deliveries to nearby out-of-home locations, ultimately increasing overall success rates and efficiency.
Advancements in Customer Communications
Automation already plays a pivotal role in keeping customers informed throughout the delivery process. Many carriers utilize automated systems to send branded communications when parcels are received or out for delivery.
The next step in intelligent automation is to send communications at optimal times when they are most likely to be useful and visible to customers. Additionally, these systems can integrate with other platforms to enrich communications with valuable customer data. For instance, if a parcel is en route, these communications can offer customers the option to redirect their delivery to an out-of-home location, seamlessly integrating with the route planning system.
Furthermore, by leveraging real-time tracking and customer data, carriers can send personalized communications tailored to individual preferences. For example, if a customer consistently uses a particular parcel locker, carriers can notify them when space is available, encouraging increased utilization of the locker facility.
Drones: Overcoming Limitations
Drone delivery is a recurring topic in last-mile innovation, but its practicality remains questionable. Drones are highly dependent on weather conditions, require designated landing areas, and necessitate regulatory approvals. Additionally, scalable drone operations require expensive and sophisticated self-piloting technology. McKinsey estimates that drone deliveries will only become economically efficient when one operator can manage 20 drones simultaneously— an achievement yet to be legally permissible or technologically feasible in most jurisdictions.
Portable lockers have yet to emerge, but the future might hold self-driving vehicles suitable for the mid-mile. While fully driverless vehicles might not be viable for the last mile due to the need for human interaction during delivery, they could find applicability in the transportation between fixed distribution centers. This potential advancement could reduce costs and enable drivers to navigate different routes efficiently.
Robotic Deliveries: A Limited Scope
When discussing last-mile automation, the topic of automated delivery robots inevitably arises. However, the reality is that broad implementation of robots in last-mile delivery is unlikely. Their limited capacity restricts them to handling only a few deliveries per trip, which hampers carrier efficiency.
Moreover, robots can only operate when customers are guaranteed to be present for the delivery. If a customer is unavailable, the journey is deemed a failure, and the robot cannot remove the package or wait indefinitely. In such cases, valuable time, resources, and money are wasted. Considering the cost of purchasing, maintaining, and potentially replacing robots, delivery personnel using vans offer a more cost-effective and versatile solution for carriers.
The Potential of Self-Driving Vehicles
The logistics industry typically undergoes gradual transformations, but with the continued upward trajectory of parcel volumes, the significance of efficiency and automation only grows over time. While the future may present a different last-mile landscape, featuring curated delivery options based on consumers' previous purchases, locations, and preferences, drones and fully autonomous ground vehicles are unlikely to be part of the equation unless there are dramatic regulatory and technological changes. Instead, consumers will likely select delivery to a parcel locker served by carriers using semi-autonomous vehicles and intelligent real-time routing. Although much of the process will be automated, a human touch will still be necessary to place packages into lockers.
The complexities and challenges of last-mile delivery require human input and creativity. The power of friendly interactions and smiling service profoundly impacts the customer experience.
In practice, successful last-mile automation focuses on enhancing productivity, reducing friction, and minimizing costs without replacing the human element. To effectively implement automation, last-mile businesses must ensure that employees embrace these changes.
By carefully considering where automation can add value for both employees and the bottom line, companies can foster a harmonious transition towards automation.
The Future of Autonomous Parcel Industry
At Ondway, we believe in harnessing the power of last-mile automation through practical strategies. By prioritizing cost-cutting measures, improving efficiency, and enhancing customer experiences, carriers can revolutionize their delivery operations. Embrace the realistic possibilities of automation in the last mile, connect with Ondway's expertise, and unlock the full potential of your delivery network. Discover a future where automation complements the human touch, propelling your business towards sustained success.
Felipe Antunes, CEO at Ondway