Even before the current crisis, e-commerce was already becoming a primary sales channel and was changing the warehouse, fulfillment, and last mile delivery landscape. The current pandemic and resulting stay-at-home economy are accelerating that shift and remaking retail supply chains. This has lent both urgency and opportunity to the search for creative fulfillment solutions. Solutions for getting products to consumers, quickly, safely, and profitably.
Here are a few of the shifting patterns that are happening in fulfillment logistics and final mile delivery.
To deliver orders faster and reduce costs, retailers and logistics companies are moving more inventory closer to customers. The goal is to be less dependent on large centralized warehouses by creating smaller local and regional distribution hubs for greater efficiency. Creating what is essentially an omnichannel fulfillment and supply chain. These retailers, manufacturers, fulfillment centers, warehouses, and 3PLs are getting creative in their search for additional distribution space closer to customers. In addition to delivery, this local fulfillment model must also handle returns.
Retailers have a variety of options for their last mile operations and today’s omnichannel world lends itself to a mix of solutions. Some insource, like Target who purchased Shipt for managing local delivery from stores, while a majority continue to use the large parcel delivery companies like FedEx and UPS. Other retailers choose to work with third-party logistics providers (3PLs) and regional last mile delivery services that are often less costly and offer more control.
While not a new idea, in-stores and curbside pickup are easy and convenient fulfillment options that have seen tremendous growth as a result of Covid-19 – becoming one segment of an evolving omnichannel fulfillment model.
Some crowdsourcing companies that originally transported people have shifted focus during the pandemic to add delivery services of foods and other essential goods. Others that started as food delivery companies are taking the opportunity to expand their services into a wider range of goods.
We are all used to seeing and using secure storage lockers in public places like museums, trains stations, gyms, and offices. Smart parcel lockers are an extension of that concept. Convenience and security are critical. Smart lockers are most effective in secure locations where customers are concentrated, such as on college campuses, in retail stores and multifamily dwellings, and anywhere that is ‘on the way’ in the customer’s daily travels. Of course, the Covid-19 pandemic has closed many college campuses and shifted employment to work-from-home. This reduces the convenience of this model somewhat, at least until the current crisis passes.
Consumers have come to expect fast, flexible, and, for the most part, free home delivery, and retailers are looking for innovative ways to satisfy the customer. Regional last mile shippers like Leigh-David are helping retailers meet the rising demand for efficient and cost-effective last mile logistics and shorter fulfillment cycles.
Read the previous articles in the Last Mile Logistics Trends series: