Greg Hewitt is CEO of DHL Express US, where he is responsible for the company’s International Express business. He reflects on the future of last mile logistics on MH&L: “Companies must be constantly ready to adapt their supply chains to reflect changing market conditions and customer demands”.
Greg Hewitt on MH&L: “To keep that road open and its traffic running efficiently, logistics strategies must evolve constantly and quickly by integrating flexibility and technological innovation in the core of every process. Logistics and shipping represent the final and essential factor in the equation for e-commerce success. The most important logistics challenge is still in front of us, and it involves the complex and often-discussed issue of last-mile delivery. The difficulties will continue to compound as more people around the globe move to dense, urban areas, and as seasonal demand for e-commerce products expands”.
A recent study from DHL and Euromonitor International identifies four main trends that are shaping the future of urban last mile delivery: localized delivery, flexi-delivery networks, seasonal logistics, and evolving technologies.
Consumers will continue the move toward online purchases and expedited delivery. They not only want their products quickly, but they also want them delivered in a certain way and at a specific time. As a result, delivery networks are becoming more localized, shifting the strategy to focus on regional fulfillment to shorten the last mile and allow for making fast deliveries that can be customized to specific times and locations. The move toward regional fulfillment is becoming micro-focused and clean. The ideal system of today and the future might be described as decentralized but pegged, with large warehouses that feed into smaller regional warehouses closer to urban centers.
Consumers want to have a degree of control over when, where and how their e-commerce purchases are delivered. The bottom line is that they want to minimize the time spent waiting for a package, especially if a signature is required. Flexi-delivery options are changing the way transport operators approach the last mile. Some examples include service pick-up points, parcel lockers, bicycle delivery, and electric vehicle drop-off.
Global holidays that see a significant spike in online shopping and of course corresponding delivery needs. Delivery networks need to adapt to these instances of sporadically high orders, especially given that consumers expect fast and on-time delivery regardless of whether they are seeking a holiday present or a deeply-discounted item for personal use.
Advanced platforms and tools have already transformed the way products are moved and tracked across the globe today, and new, updated approaches promise important strides down the last mile. While futuristic ideas like automated delivery vehicles and aerial drone delivery are important, core technology progress matters most immediately. Cloud computing, AI, data collection through the Internet of Things, and blockchain technology promise to streamline delivery through automation. Ultimately, improved automation through machine learning can expand the use of robotics in warehousing, while refining inventory management and peak planning processes.
Gregg Hewitt: “By embracing new technologies, and by adopting flexible solutions and adaptable transport methods, logistics leaders are already on the path toward delivering what consumers want, when they want it and where they need it”.