Sunday, 28 april 2019 | Redacción CEU
Buying has never been easier than now. One cellphone, several clicks and, of course, some money in the wallet are enough elements to have access to millions of products which are distributed in countries as far away as China, India or Canada. E-commerce is testing the logistic models of half the world. Thousands of companies compete to improve their supply chain, develop optimized systems and speed up deliveries and, in this way, try to win consumers over. In this race based on immediacy, free-charges and convenience, businesses have found a complex problem: the closer the product to its destination is, the more obstacles it finds. This is the paradox of the last mile.
The final stretch of the journey that a product makes to reach its destination is known as the last mile. If we let ourselves to be guided by the tracking of an Internet purchase, this would be the last phase: the one corresponding to "out for delivery". Therefore, it is the step that goes from the last point of distribution (warehouses, stores, logistics centers, etc.) to the doors of the clients' houses. It is also the most complex, the critical point of e-commerce logistics and, lately, the most common cause of headaches among the professionals in the sector.
Where this type of shipments comes across more obstacles is in cities. It could be said that big cities are the new hurdle of logistics processes: scenarios where skill and creativity are key to successfully finishing the race. While in rural areas the number of orders is small and the delivery points are separated by relatively large distances, in big cities the deliveries are atomized and numerous, and the orders are placed more frequently. All this adds up to an urgent need from the sector to meet demanding deadlines, as well as the characteristic problems of mobility: traffic jams, lack of unloading areas, access to pedestrian areas, etc.
Deliveries are often inefficient and unsustainable: they mainly consist of many trips to deliver small-sized packages. The environmental impact and high costs are added to the list of unresolved problems in logistics. In turn, Amazon's boom has made the competition among companies fiercer. Timings are getting shorter, customers' expectations higher and the promises more difficult to meet. In fact, this fight for immediacy has led some players to offer deliveries on the same day, even in two hours after the purchase.
In addition to being the last link in the logistic chain, the last mile is the stage where the meeting with customers takes place. This moment is key, since the final experience of clients will depend to a large extent on it. In this phase, the most frequent problems of the customers are the failure to comply with deadlines (mainly on key dates such as Blackfriday, Christmas, Cybermonday, ...) and those derived from the incompatibility with schedules. Deliveries are usually made during working hours, so many buyers are not at home when their orders arrive. It is essential for online stores and e-commerce companies to solve these problems. If users do not get a satisfactory service, they will probably choose another company in their next purchase.
There are different approaches to solving these problems. Some brands believe that it is necessary to promote an approach which is focused on consumer awareness. The demand for free and immediate shipments has an impact on the viability and quality of the services themselves. Some companies, especially the smaller ones, cannot afford the cost of maintaining a system that meets these expectations. Then, their proposal is to charge that cost or part of it to users and offer them as compensation an improved service.
In response to a service that adapts to the practical needs of consumers, some startups that enable customers to choose the day of delivery and the timing have appeared. These companies also work at night, so they can make deliveries when the buyers have left work. Another alternative to solving the paradox of the last mile is that customers are the ones who collect the packages by means of smart mailboxes and lockers or pick-up stores. There are also proposals based on collaborative models that offer the possibility of bringing clients in contact with the closest messengers.
One of the most innovative and futuristic bets is the use of robots, autonomous cars and drones. These initiatives are in the experimental phase, but the large companies which are specialized in online commerce are investing more and more in the design and development of this type of technologies. For example, Amazon has a pilot program of delivery robots named Scout, Continental presented in the latest edition of CES a project that combines autonomous vehicles with robots and Fedex also works on the development of the delivery-robot called SameDay Bot.
The CEU IAM Business School together with the Institute for Careers and Innovation in Logistics & Supply Chain (ICIL) has designed a Management Program in e-Commerce and Logistics that provides practical experience in the field of electronic commerce. Thanks to this training course, participants will be able to acquire key knowledge in areas such as people management, technology and processes and product care that will enable them to successfully lead the digital transformation of business.