Guest contribution • 06.07.2022

Brave new last mile

A dilemma of digital transformation versus sustainability?

The pandemic has given an additional boost to online retail with its record volumes already recorded in previous years. As a result, last-mile delivery is bursting at the seams, especially in metropolitan areas. There are limits to the capacity of delivery vehicles, drivers, and urban parking space. This is not the only reason why the topic of "last mile" is once again moving to the top of the agenda of logistics experts and online stores.

A man with folded arms in a yellow DHL T-shirt in front of the interior of a...
The author of this article is Markus Reckling, Managing Director Germany at DHL Express.
Source: Deutsche Post DHL Group

Customer expectations regarding the delivery of shipments are also changing. Today's consumers are digitally connected. They have high purchasing power, a need for express deliveries and expects convenience, favorable prices, and maximum sustainability.

In addition, recipients expect to be able to decide for themselves where and when they receive their shipments. Narrow delivery time windows, automated and conveniently located pick-up and drop-off points available 24/7 and a choice of delivery and rerouting options are now almost a prerequisite for choosing logistics partners. 

Man with beard in suit looks at camera
Co-author of this article is Alf Dietrich, Managing Partner of THERON Advisory Group.
Source: Alf Dietrich

From push to pull: digital transformation – key to sustainability

Most flows of goods used to follow the push principle. Based on estimates and forecasts, decisions were made about whether and how much to produce. However, with internet, EDI and other formats this has changed during the last decades especially regarding customers in the B2B segment. The automotive industry has shown how the flow of goods can develop from push-based to pull-driven supply chains. Smartphones as well as real time data make the pull principle the new standard on the last mile – with new services and improved customer experience. This way, demand is determined based on actual real-life demand and continually ongoing inventory checks.

Hello Fresh Benelux, for example, offers its customers to choose between different two-hour delivery options and recommends the one that is most CO2-efficient. Route optimization allows more efficiency and sustainability. At DHL we already have implemented a very sustainable last mile solution years ago. Our Packstations are not only convenient, but they also reduce CO2 as the stop density is higher and no second delivery attempts are needed. Solutions like On Demand Delivery used by the customer on the smart phone, additionally help to avoid unnecessary delivery attempts, as customers can choose the desired delivery time and location for their shipment in advance.

A DHL packing station with solar panels on the roof photographed from above, in...
Source: Deutsche Post DHL Group

Data is the new gold: sustainability models and quantum leaps in customer centricity

All new digital services have one thing in common, they need data to work. Today, enormous amounts of data are available in real time that can be used for route optimization. However, the data needs to be of high quality and its usage must be socially accepted. Improved data quality and data clearance will allow for enormous potentials regarding efficiency and sustainability. Incorrect address data still leads to failed deliveries.

Approaches based on geo codes like what3words or Google Plus Code will help here and will therefore improve sustainability. Mobile phone numbers of consignees allow direct communication, regardless of it being machine to machine or via the courier. Sounds like heaven, doesn’t it?

The problem is: web shops need explicit consent of the consignee for supplying the mobile number to a third party, e.g. a logistics service provider. Moreover, data protection is handled and regulated very differently in different countries. Therefore, the availability of the data and its usage can be a really important competitive factor in business and service. It really is the combination of great digital service plus availability of data that leads to success. Without data all the great new digital tools will not yield the expected benefits.

what3words covers the earth with a grid of 3 by 3 meters, consisting of 57 trillion squares that are uniquely identified by a combination of three words. Even places without an address can be included in this way.

Speed and quality of transformation – sustainability needs both disruptive leaps und incremental steps

Established CEP players (courier express parcel) are certainly experts in incremental improvement. But silo thinking often interferes with change.

Start-ups with disruptive approaches use this opportunity. White label approaches like for example Hamburg-Box or Micro Hubs burst these silos and create more convenience via consolidated deliveries and integrated communication. The higher number of shipments at each stop reduces costs and improves sustainability at the same time.

It will probably be a while before this is used across the board, but it is the combination of disruptive leaps and small steps that will take us forward. Established CEP players have to open themselves up for it to defend their own market position. Young innovative disrupters on the other have a lot to gain from collaborating with the large incumbents. If both partner at eye level the future of to a green and customer centric last mile is bright.

Building of the DHL Innovation Center in Dubai in the evening; copyright:...
Source: Deutsche Post DHL Group

Digital natives and new work – power source for sustainability and digital transformation 

A major source of inspiration for established companies is certainly also a new generation of employees who define themselves as digital natives. These talents expect flexible working hours and locations, coworking formats, a good work-life balance, sustainability, social responsibility, and managers who are willing to walk the path into the new working world together with them. Ecological developments, social aspects, urbanization trends and the technical potential make the logistics industry attractive for this target group. However, CEP companies must live the new work culture honestly. KEP companies will have to honestly live this new kind of culture to attract digital natives. In return, businesses living this culture will no doubt outperform their peers.

The future must be shaped collectively

The last mile requires collective questioning and collaborative concepts for digital and sustainable transformation. Now is the time to better design it to unite efficiency, sustainability, and customer experience. At DHL Express, we are very excited to help shape this process.

Authors: Markus Reckling, DHL Express & Alf Dietrich, THERON Advisory Group

related articles:

popular articles:

Thumbnail-Photo: Ease of returns as top priority in online purchase...
09.02.2022   #online trading #e-commerce

Ease of returns as top priority in online purchase

Right returns process reaps the most consumer loyalty

89 percent of consumers identify ease of returns as top priority when purchasing online. That’s according to new data from delivery experience platform Sorted, which found that retailers who get the returns process right will reap the most ...

Thumbnail-Photo: Serving customer expectations with fast delivery...
04.05.2022   #Tech in Retail #iXtenso videos

Serving customer expectations with fast delivery

Automated storage and retrieval system AutoStore @ NRF 2022

„Retail has truly changed,“ says Jon Schechter, Business Development Manager at AutoStore System in an interview at NRF 2022.The COVID pandemic has pushed e-commerce demand even further, customers expect fast and reliable ...

Thumbnail-Photo: Home pickup for convenient ecommerce returns...
16.03.2022   #customer satisfaction #services

Home pickup for convenient ecommerce returns

Narvar service available in ten major metros in the U.S. including San Francisco, NY, LA and Chicago

Narvar announced the rollout of its Home Pickup service, a carrier-agnostic returns service that allows shoppers to schedule a courier to pick up return packages at their homes. More than 70 retailers, including DSW and Ann Taylor, piloted the ...

Thumbnail-Photo: Blue Yonder: Most consumers willing to delay deliveries if its more...
04.05.2022   #sustainability #coronavirus

Blue Yonder: Most consumers willing to delay deliveries if it's more sustainable

Survey finds 86% of consumers willing to wait longer for their orders if it helps the environment, 44% say their interest in shopping sustainably has increased since the start of the pandemic

Blue Yonder has released findings from its 2022 Consumer Sustainability Survey, which revealed retail consumer preferences related to sustainable shopping habits. The survey found that more than three-quarters (86%) of consumers are willing to delay ...

Thumbnail-Photo: Robomart signs deal with Unilever to launch The Ice Cream Shop Robomarts...
17.05.2022   #Tech in Retail #smartphone

Robomart signs deal with Unilever to launch "The Ice Cream Shop" Robomarts

Pilot partnership introduces ice cream delivery – arrives in as little as two minutes

Robomart, the world’s first store-hailing service, has announced a partnership with Unilever, the world’s largest ice cream producer, under its virtual storefront, The Ice Cream Shop. Unilever will deploy a fleet of Ice Cream Robomarts ...

Thumbnail-Photo: Innovations in logistics from delivery to return...
11.05.2022   #Tech in Retail #logistics

Innovations in logistics from delivery to return

The new last mile: from orderable stores and smart packaging

Logistics on the so-called "last mile" can well tolerate clever solutions, the demand for orders is increasing and future-oriented, sustainable ideas are needed. This applies to delivery as well as transport packaging and the big issue of ...

Thumbnail-Photo: Visibility and control are consumers’ priorities for last-mile delivery...
25.03.2022   #customer satisfaction #services

Visibility and control are consumers’ priorities for last-mile delivery

Consumer demand: tracking deliveries via GPS and redirecting deliveries

Anyline announced findings of its “Last-Mile Delivery: Customer Perception Report 2022.” The survey, conducted on behalf of Anyline by Researchscape, highlights the major pain points of last-mile delivery that have surfaced since the ...

Thumbnail-Photo: Glory expands presence to support growth in Poland...
14.04.2022   #logistics #cash management

Glory expands presence to support growth in Poland

Glory expands its direct sales & services presence in Eastern Europe to support growth in Poland

Glory has announced continued expansion, with the opening of a direct sales office in Warsaw. Glory Global Solutions (Poland) LLC will capitalise on growth in the Polish market specifically in retail sector. ...

Thumbnail-Photo: The iXtenso editorial team was hungry ...
28.02.2022   #delivery #online food retailing

The iXtenso editorial team was hungry ...

... and tested the Gorillas and Flink delivery services

Food delivery services in city centers are picking up speed. Drivers with oversized backpacks on their backs are increasingly common, sometimes even late at night. Popular services promise to deliver the groceries ordered via app to your doorstep ...

Thumbnail-Photo: FedEx plans to test autonomous drone cargo delivery with Elroy Air...
25.04.2022   #e-commerce #logistic systems

FedEx plans to test autonomous drone cargo delivery with Elroy Air

FedEx and Elroy Air work to launch test flights aimed at middle-mile delivery in 2023

FedEx Express is teaming up with California Bay Area-based Elroy Air, the company building the first end-to-end autonomous vertical take-off and landing (VTOL) aerial cargo system. As a first of its kind agreement in the U.S., FedEx Express ...

Supplier

GLORY Global Solutions (Germany) GmbH
GLORY Global Solutions (Germany) GmbH
Thomas-Edison-Platz 1
63263 Neu-Isenburg