Capitalizing on growing demand for last-mile home delivery• 4 min read
How to use technology to automate core logistical tasks and build an entirely new (and easier) way to handle deliveries at scale.
A little over a year ago, as the pandemic kicked off a chain reaction of lockdowns, shutdowns, and general uncertainty, our daily routines migrated online. Jobs. Schools. And especially shopping. In 2020, online spending jumped a jaw-dropping 44% year-over-year in the US, with market forecasts indicating that it’s a trend that’s here to stay.
The impact on the global economy has been massive. McKinsey believes we effectively time-traveled five years into the future in those first eight weeks, in terms of digital adoption by consumers and businesses. Nowhere was this felt more deeply than home delivery.
From that moment forward, organizations of all shapes and sizes — delivering everything from clothing to wine to groceries to pharmaceuticals — scrambled to build last-mile home delivery networks from scratch, or quickly scale up to handle the overwhelming influx of orders from former brick-and-mortar shoppers.
Fleets. Drivers. Schedules. Fueling. Reroutes. Call centers. Complaints. It was (and still is) extremely difficult to manage. For larger retailers, daily logistics tasks have grown exponentially. Smaller companies, on the other hand, are quickly reaching a tipping point where handling all deliveries in house becomes unworkable.
Economies of scalability.
The primary challenge is scalability. As a small shipper, it’s relatively simple to figure out the ideal routes for five packages moving across town. But what happens when five becomes 50… and 500… and 5,000? Can your team keep up using the same spreadsheets and dispatchers, or legacy fleet management tools that haven’t been upgraded in years? Probably not. And if you’re delivering 500,000 parcels a day? Absolutely not.
Because underneath the scalability issue is one of constant complexity.
To fulfill all your home delivery orders, you might need an in-house fleet, or a third-party fleet, or a mix of both, each with its own array of large trucks, smaller vans, refrigerated trucks, e-bikes, and scooters. Mixed fleets are practically a prerequisite for any company delivering perishables, furniture and other large items, or serving urban areas where 18-wheelers can’t go.
Directly related to managing mixed fleets is the challenge of managing a mix of drivers, determining the appropriate cost and compensation model for each, and incorporating drivers who are part of a third-party company or work in the gig economy.
To put it bluntly, the status quo is no longer an option. If you want to keep up with unprecedented growth in demand, there comes a time when adding more people is not going to solve the problem. You’ll either have to give away market share to competitors or deal with an inevitable drop in service quality that could damage your brand.
Unless, that is, you can find a more intelligent, efficient approach to managing core routines like planning, dispatching, routing, navigation, driver communication, and more.
Automation drives higher efficiency.
Fortunately, there are new ways to deal with the day-to-day details of last-mile logistics — namely, smarter technology that can accommodate growth at scale and deliver huge gains in efficiency.
New logistics solutions use the power of automation, AI, and algorithmic decision-making to make routes more efficient, maximize daily completed deliveries, and gain visibility into the location of every vehicle in the fleet and every package it is transporting. Because these solutions thrive on figuring out complex problems, they are ideally suited to optimizing all of the decisions that make up a fast, on-time, last-mile delivery experience.
Via Logistics, for example, shares similar origins as Via, a technology leader with more than 400 global partners that is responsible for the intelligent, on-demand routing systems powering the largest microtransit networks in the world, from Berlin to Sacramento.
However, whether Via’s algorithm is automatically optimizing routes for passengers or products — a package can sit in a vehicle much longer than a person can — the fundamental problem is the same: Figuring out the most efficient way to move passengers or packages to their ultimate destinations.
In this capacity, Via Logistics has made a name for itself as a valuable technology partner with partners around the globe, from Los Angeles to Tokyo. The platform’s ability to rapidly scale up automated routing and dispatching comes from the power of its algorithms, which are a good fit for the interrelated challenges of scale and complexity. The more packages you have to deliver, the more permutations there are to consider.
Via Logistics is particularly skilled at this process, informed by many years of Via’s experience rapidly implementing large on-demand microtransit fleets. Some highlights include:
- Global partnerships that range from a few hundred to 500,000 deliveries a day
- A Tokyo partner that increased drivers’ efficiency 1.3x with the Via Logistics platform
- A UK partner that halved the time it takes to pack and deliver a single vehicle
- Up to 80% reductions in planning time, allowing teams to focus on initiatives tied to core business growth and increased volume of online orders
But even the best algorithm needs to be paired with the technology necessary to turn automated insights into real-time dispatching that can be operationalized. Especially when those organizations typically do not have experience building apps, dashboards, tracking systems, and integrations to e-commerce sites and other enterprise systems.
This is why Via Logistics is becoming a preferred technology partner: Because it can serve as an experienced guide, one that is already helping retailers and shippers make demonstrable gains in efficiency with intelligent logistics technology — even in very complex deployments. Just as important, Via Logistics can deliver a fully branded experience that is simple to deploy, easy to scale up, and can be supported with a relatively small internal team.
The key word here is partnership. Stepping away from traditional manual processes can be done independently, but typically requires very large investments of time and resources — both of which are in short supply as demand for home delivery continues to grow. Going it alone also requires taking on a great deal of operational, reputational, and data privacy risks.
Working with a partner like Via Logistics, on the other hand, gives retailers and others a way to benefit from the experience of many other deployments and gain immediate access to technology that is proven to improve efficiency for last-mile, multi-stop deliveries.
For more details on Via Logistics and the advantages of working with an experienced technology partner, contact our team to learn more.