Member Article

Parcel delivery is changing – but how quickly is innovation being embraced?

According to a number of articles and a new survey just released entitled: The Future of Fulfilment Vision Study it would appear that same-day delivery is expected to be the norm by 2023. The survey was completed by retail and logistics professionals and also suggests that a significant minority foresee two-hour delivery by 2028. 16 countries participated in the survey, including the UK, which also looked at their omnichannel logistics plans and experiences in 2017 as well as future plans.

Some of the disruptive influences to parcel delivery predicted in the years ahead include drones, autonomous vehicles and crowdsourced delivery such as a network of drivers who take on an order rather than a carrier company. In fact the latter appears to be coming to the fore more frequently these days.

However, while all these innovations sound very exciting, it would appear that some of the more traditional problems facing deliveries are still causing havoc with retail and logistics professionals today. For example, according to this survey many feel that backorder backlogs and inventory allocation as well as freight costs are still creating considerable headaches.

Many of the retailers have already set up or plan to implement click and collect solutions, which is good news as I certainly believe that today’s consumers want far more options to collect or pick up their parcels than just home or work. Indeed, research that we have undertaken over the years shows us that consumer habits are changing, and the majority of shoppers now want delivery options that extend beyond the home. They also want more efficient services and the ability to be able to track their online orders and parcels every step of the delivery journey. What’s more, consumers want complete flexibility and control over when and how their parcel will be delivered. That said, they appreciate and are quite prepared to wait for what they deem as non-urgent parcels – so not all orders need to be same day or within two hours. The important point to note here is that what consumers really want is total visibility so that they know exactly when their parcel will arrive, whether that is same day, next day or within a number of days.

Back to the Future of Fulfilment Survey which also highlighted that most (87%) agreed that accepting and managing product returns was a challenge, as the increase in free and fast product delivery has been met with an increase in product returns. More than 60% of the retailers that currently do not offer free shipping, free returns or same-day delivery plan to do so, while 44% expect to outsource returns management to a third party. Again, in our own research we found that what consumers hate most about online shopping is returning parcels – so it appears to be causing problems all round.

However what I did find surprising is that today 55% of organisations still enable their omnichannel logistics through pen-and-paper processes, although 72% do use barcode technology for some aspects of their logistics.“ By 2021, handheld mobile computers with barcode scanners will be used by 94% of respondents for omnichannel logistics. Today smart retailers realise that in order to meet and, indeed, exceed the demands of the modern online shopper it is imperative that they firstly automate as much of the process as possible from picking the parcel to shipping it out the door and that they integrate the whole logistics ecosystem. This includes utilising the latest technology to help optimise order processing, warehousing and logistics, and how they work more collaboratively with the carrier. Fundamentally the service and approach needs to be seamless and this can’t be achieved without increased collaboration supported by technology. Therefore, in 2018, retailers must adopt an even more collaborative approach in order to respond effectively and efficiently to the demands made of them. Retailers are now striving to make the parcel journey one continuous motion and most recognise that the best way to achieve this is to outsource this process to best-in-class providers, which allows them to focus on their core business.

So to conclude, I also read recently that DPD in Germany has been running a pilot project to use electrically assisted transport bikes to deliver parcels. The trial involved bikes in the northern Bavarian city of Nuremberg and was deemed successful, so now they are seeking to launch further deliveries by bike in other areas of Germany. The way this works is that, every morning, a van delivers the parcels to a micro-depot in the city centre where the bikes are stowed. And from there the “last mile” is undertaken on two wheels. Reportedly one of the key benefits of bicycle delivery is their all-weather capability. DPD said that even in wintry conditions it can rely on these transport bikes, but admitted that operating entirely without conventional vehicles is not yet possible and that it needs vehicles not just to make deliveries to its micro-depot, but also to serve major business customers in the city centre.

What is interesting is that this particular innovation takes parcel delivery back to two wheels. Obviously traffic congestion is getting worse in many metropolitan areas and bikes can beat that. And some towns are limiting vehicles on the grounds of emissions as well. So bikes, along with drones and autonomous vehicles, may be the future of delivery. But for now – automation, collaboration and streamlining processes is an absolute must for all involved in parcel delivery.

This was posted in Bdaily's Members' News section by Matthew Robertson .