For decades, the courier and delivery industry has been locked down by traditional delivery services provided by companies like UPS, Fed-Ex, and the US Postal Service. Today, however, a new generation of couriers is using automation and advanced AI technology to snatch the baton at the journey’s final leg.
“We specialize in the unique challenges of last-mile delivery,” says Anar Mammadov, founder and CEO of Senpex. “That final mile is the hardest, but customers are turning to us because we get the job done with shorter delivery windows, constant driver visibility, and real time GPS tracking. Plus, our model adds never-before-seen flexibility to the supply chain.”
Last-mile delivery services are growing despite the added cost
Over the past several years, a surge in online shopping coupled with global shutdowns resulting from the COVID-19 pandemic have made the public increasingly dependent on fast, reliable delivery services. Whereas only 24% of shoppers placed same-day delivery orders in 2020, 68% say fast shipping became a deciding factor in their 2021 online purchases. This has led courier and delivery services to implement technologies like logistics route planning and multi-stop planning for last-mile deliveries.
Should traditional delivery services be worried? The market seems to indicate they should. In 2018, Statista reported that the North American last-mile delivery market amounted to $31.25 billion, and is projected to expand to $51 billion in 2022.
Although, according to Mammadov, traditional delivery services still offer more affordable pricing. This is because the crucial last-mile factor of a delivery order can potentially add up to over 53% of the shipping fee.
“The price of same-day delivery is higher than that of next-day delivery from a company such as FedEx,” remarks Mammadov. “When you guarantee accuracy down to the hour, the cost skyrockets.”
While today’s consumers are willing to pay a few dollars more for same-day delivery, if historic shifts in customers’ buying behavior is any indicator, this trend may not last. Last-mile delivery processes are almost entirely automated, and those processes are advancing. Enhancements in AI technology are constantly improving item batching and route optimization, and these features are steadily boosting delivery efficiency and productivity.
On the other hand, traditional delivery services still sort and prepare packages manually. This limitation hamstrings couriers when it comes to speeding up their processes or managing high delivery volumes.
Last-mile delivery services may not be more affordable than traditional shipping methods, but they are steadily gaining the upper hand. Supply flexibility, faster delivery windows, driver visibility, and real-time tracking are putting this new breed of courier on top.
Comparing the supply flexibility of traditional delivery services and last mile couriers
The last two years have shown the world the importance of a flexible supply chain. Freedom to make adjustments in production levels, raw-material purchases, and transport capacity allows the supply chain to accommodate day-to-day fluctuations. Because the traditional rigidity of supply chains does not allow for these changes to occur quickly, adjustments in any part of the chain cause problems along its entire length.
Traditional delivery services are a key link in supply chains. While a team of full-time drivers provides consistency and reliability, the structure of that team may not be able to cope with spikes in demand and periods when shipping exceeds normal volume.
Last-mile couriers often employ a flexible supply of drivers, thus enabling delivery services to meet demands during peak seasons. This model also prevents wasted expense on idle manpower during periods of low volume.
Comparing faster delivery windows, visibility, and tracking between traditional delivery services and last mile couriers
When customers place an order, they want it to arrive quickly. Furthermore, they want to know exactly when it will arrive and where it is on every leg of the journey — especially in the case of sensitive products such as health specimens, medications, or data — though traditional services are unable to guarantee exact or predictable delivery windows. While they can usually predict that items will arrive within five to ten business days, this depends on the courier’s schedule as well as current demand. And although traditional services do offer delivery tracking, it is minimal compared to today’s standards. Packages are sorted manually without real-time monitoring, providing a limited view for both the retailer who sent the package and its recipient.
Thanks to the technology involved in last-mile delivery, same-day or next-day delivery windows can be guaranteed confidently. This technology also allows retailers and customers constant visibility of their packages. Everyone involved can track items by GPS as they move. In addition, they are alerted with real-time updates on their shipment. Both customers and retailers are immediately alerted when items arrive, and today’s customers expect this with every shipment.
“Customers want convenience,” explains Mammadov. “They want their ordering, payment, scheduling, and tracking all in one place. Businesses can integrate this entire process, including real-time communication and driver visibility, into their online store.
Technological advances are transforming the shipping landscape. Traditional delivery services are competing with technology-enabled last-mile delivery providers for every dollar of online purchases, and the fight is not going in their favor. For more information on the benefits of technology-enabled last mile delivery services, readers can visit Senpex’s website.