Invest in last-mile to ensure business success
Last-mile connectivity has in the recent past, pushed beyond the traditional line of thought, primarily driven by Indian consumers being more urbanised, connected and shopping more. examines if the logistics and transport industry is still striving to ada
Sridhar LR
Founder & CEO, Connect India
Consumers are more connected than ever, with the internet at their mercy. With online sales on an upward trajectory, there is a need for logistics companies to optimise their last-mile delivery, as visibility is of the essence to ensure repeat customers on the platform. This brand visibility is generated only when the delivery is quick and efficient, leading to customer satisfaction. Connect India implements several practices to optimise last-mile delivery; tracking not just the vehicle but the drivers and other personnel that handle routine procedures will help in deciding where valuable time can be saved to optimise the delivery process. Also, every logistics company has a different entrepreneurial model that has its own qualitative and quantitative restrictions, so assisting factors like technology should allow for any change in procedure as the industry is dynamic and malleability is necessary to survive.
Despite providing for these, optimised last-mile delivery comes down to the address. Setting up rapid fulfilment centres in every pin code has helped not only find addresses quickly but also provided customers with the opportunity to directly interact with their respective centre and ensure corrective measures are taken in real-time. Considering the lack of infrastructure in some rural areas, providing for multiple modes of transport like cycles and scooters aside from the conventional transportation has assisted us greatly in ensuring effective deliveries.
VV Rao Director, Accutime
The logistics and transport industry has introduced extensive technological and innovative practices in last-mile delivery, mostly driven by e-commerce business requirements. A large chunk of the lastmile delivery share is in the B2C segment, where the margins of logistics companies are wafer thin or negative due to increasing cut-throat competition among service providers. The entry barriers are high as the asset-light business models do not work in such a price-competitive market. Last-mile logistics companies need to own a fleet and invest in technology to remain competitive, which impacts their ability to hire quality manpower and invest in training as most of them prefer to hire delivery teams on contractual basis.
However, while the people deployed in last-mile delivery are technically trained, the softer aspects of service like grooming, communication skills, and attitude of the delivery staff are mostly ignored. As the last-mile staff is mostly outsourced and paid on productivity basis, this practice makes the people highly mechanical and quite impersonal in their attitude towards customers. While route planning is important for better productivity and cost optimisation, delivery by appointment is normally restricted only to so-called premium customers. Therefore, the gap between customers’ expectations and the ability of the LSPs to deliver will remain for a long time to come, till business models undergo changes and evolve to meet the needs of all stakeholders.
Ajay Khosla
General Manager – North 1 Scorpion Express
In India, last-mile logistics is one of the most misunderstood processes in the SCM. Till a few years ago, last-mile was not seen as an important component, but today it accounts for 25-30 per cent of the total shipment cost. Last-mile, in layman’s terms, is the last step of the entire process of goods moving from the distribution centre to the end user. Over time, last-mile dynamics have changed rapidly and today, the consumer is willing to pay a premium for receiving the freight on the same day or for an immediate delivery. This window offers big opportunities not only for e-commerce giants but for LSPs as well to think out of the box and generate bigger revenues. That said, there do exist certain challenges. Presently, e-commerce is growing with a CAGR of 30 per cent, and the three mega cities of Delhi, Mumbai, and Bengaluru are contributing 40 per cent of the total market size. In metro cities, last-mile deliveries are hampered due to rising levels of traffic and lack of parking spaces. E-commerce giants are coming up with offline delivery outlets that hold products for consumers who can then visit and pick them up from these locations, providing relief to last-mile capacities and cutting cost in a big way.
Indian logistics bank heavily on surface transportation due to a better network when compared to other modes of transportation, but this is creating a delay in transit times and resulting in challenges like driver shortage and increased fuel prices. In recent years, LSPs, and even retailers with logistics centres, have moved these hubs from cities to surrounding smaller locations to reduce rental costs. With increasing shipments in urban areas, however, there are now more multi-tiered distribution systems where hubs are augmented with smaller logistics centres and fulfilment operations in the city. With an emphasis on logistics and fulfilment due to an increase in on-demand or same-day delivery, there is immense pressure on the fulfilment side to turn orders around on a much faster scale than a lot of the technology today is capable of doing.
Piyush Kumar Singh
Industry Expert – Logistics & SCM
Last-mile delivery logistics is no rocket science but one of the most common networks in the transportation industry. It’s the most important leg of a product’s journey from business to the customer, that of final dispatch from a distribution centre to the end address. I do second the opinion that the logistics and transport industry is currently striving to adapt to last-mile connectivity because modern customers expect products to arrive promptly.
Put a plan in place, leverage technology by giving customers a number of options to pick the product, implement technology that fits your business needs, analyse and assess information, establish standard operating procedures, understand both qualitative and quantitative constraints in the delivery process, manage drivers and not just the vehicle, plan around the customer, analyse your customer and measure performance against a plan - these are some of the best practices to enhance last-mile operations.
From brick-and-mortar companies to e-commerce players, all are coming up with ways to streamline last-mile logistics for greater efficiency so that they can meet the growing customer demand at a lowest cost. Adopting these best practices can go a long way in achieving successful last-mile deliveries for your business.
Ketan Kulkarni
Head- Business Development & CMO Blue Dart
Consumer buying behaviour has evolved over the past few years and last mile delivery is gaining more importance than ever due to the rise in e-commerce platforms. Like many other markets, India’s consumption story, even across tier II, III and IV towns, is being bolstered by its rapidly growing millennial and Gen Z segment, augmented by rise in literacy and disposable income rates. Blue Dart has always had an advantage in the air and ground express logistics industry in India. The company is focused on innovations for the industry in terms of deploying automation in the first mile/fulfilment/last mile & reverse logistics. Cash-on-Delivery (COD), Card (Debit/Credit) on delivery, OTM hand held devices (on the move), MPOS (Mobile Point of Sale), integration with mobile wallets, parcel lockers, parcel shops, Mobile Service Centers, Smart Truck, 24x7 Network Control Tower to ensure end-to-end visibility, SMS pre-alerts and Call Bridging, are all innovations for the last-mile.
Rajesh Neelkanta Executive Director & CEO BVC Group of Companies
Last-mile is a metaphor for the most vital leg of a product’s adventure from the business to the client. Modern-day clients request products for delivery and expect them to arrive instantly. Increasing customer demands along with a number of other components such as driver shortage, fuel cost and unusual factors like lost bundles, all add-up to make last-mile coordination a genuine struggle for organisations. Some of the best practices that can help achieve last-mile delivery success are leveraging on the latest technology in logistics to the fullest and communication with the customer to maintain visibility.
Arvind Shivkumar
Head Sales & Customer Support, Vamaship
With an urban population of over four billion, 2.7 billion smartphone users, 2.8 billion e-commerce users, and surge in internet retail sales in the last 10 years to $1.7 trillion, there has been a fundamental shift in customer expectations to which the logistics industry is striving to adapt. Consumers are more connected and have transcended from a limited number of options to multiple alternatives, increased monthly expenditures, and a preference for convenience over productivity.
Meeting customer expectations would require flexible delivery solutions, technology integrations, predictive analytics, and collaborations for wider and deeper optimisation. Some key changes that could help ease the shift may include: s 3HORTENING LAST MILE DELIVERIES THROUGH REGIONAL FULFILMENT CENTRES ALONG industrial corridors and a localised delivery network of transport operators, drop locations, and postal services.
s )MPLEMENTING REGIONAL PREDICTIVE INTELLIGENCE ON SUPPLY AND DEMAND SIDE TO service from the nearest available centre to optimise fulfilment timelines. s 3ITTING IN THE CUSTOMER S %20 TO MANAGE AND OPTIMISE ORDERS AND INVENTORY s "UILDING CAPACITY AND CAPABILITY TO PROVIDE FLEXIBLE DELIVERY SOLUTIONS s #LOSELY WORKING WITH PARTNER NETWORKS TO MEET CYCLICAL COST CONCERNS AND seasonal demands.
s 5TILISING DROP LOCATIONS FOR RETURN STORAGE
Though the above options help a logistics business optimise, an age-old adage of ‘one size does not fit all’ demands customised and tailor-made logistics solutions for industry verticals to effectively optimise the supply chain and delight the end customer.