From traditional heavy goods shipments to the new influx of e-commerce-fueled home deliveries, the last mile plays a crucial role in the supply chain. Get it wrong, and you risk alienating consumers; get it right, and you may just gain a customer for life.
The Berlin delivery market is bright with different courier jackets. There plenty of services on bikes, cars, and vans. We have Amazone Prime Now, DPD, DHL, Hermes, Livefery - recently acquired by Hermes, Packator and number of various on demand couriers. So many players on the market, yet the last mile delivery issue still exist.
We constantly get our packages delivery too late, dispatched to shops far away from home or to some neighbor that we never heard of. Last-mile deliveries require coordination among the retailer who sells the product, the manufacturer who produces it, and the consumer who purchases it. This complex network is hard to manage and the consumers are forced to give a negative opinion by the retailer.
I recently met Michael. Chilled out a Bavarian gentleman who had an innovative concept to change the rules of the game and empower consumers with the ability to influence when exactly they want to get their delivery. And many companies already have this features, where you can re-direct your delivery or change delivery time. But think how difficult it is for the courier to change his route. Power couriers have 80 to 110 deliveries to make and spend up to 10 hours on the route. Each deviation from the route makes massive delay in their already over-due schedule. So, Michael has suggested to break up this loop and use taxi drivers who have a massive standby time and utilize their working hours to make extra money with on-demand last mile deliveries.
6 weeks later we have created a lightweight MVP which connects shops with the couriers via an Android carrier app. I was happy to see the first orders started to flow. To my surprise, some of the power shops were not grocery stores but wine and design lamps stores.
10 Years ago we would still rely on the dispatcher to call each courier and inform about new orders. Massive overhead and frustrating stuff. Now with mobile technology in place. Push notification cost nothing and able to reach 1500 couriers in one second. And if only 10% have extra time and want to make extra money. We able to process 150 Orders in each 15min. Which makes the system quite profitable from day one. And because the client informs the system when they are home and they get instant notification that the package is on the way. There is no frustrated courier and no negative reviews for retailers.
I have chosen a photo of Wells Fargo as the title to shop a perfect transition from logistic to a service company. Well Fargo was one of the biggest courier company, they even co-invested in the Pony Express (1h delivery at that time) and gradually change their business to services and banking in particular. Most of the delivery companies must not be afraid of competition from each other, but rather should look at Amazon as a hollow of global retail. Save way they emerge into IT services with AWS they could soon be offering delivery order data to selected partners. The client will no see any difference in their daily habits. They will one click check out their Prime baskets and couriers will be fighting with profitability and hoping to get more orders from Amazon.
I believe there has to be an alternative to this model and so many local shops could exist and offer 1h delivery save way Amazon does, but without cannibalizing retail markup and exploiting couriers.
With standardized data transfer protocol, we could offer API for all last-mile deliveries in one city and anyone with access to the system could contribute and make a customer happy. It's like an open taxi dispatch system where carriers opt-in in the system and decide themselves which delivery to take. Think of UBER courier network with lots of different couriers companies serving the client. The client could rate a courier and automated workflow will distribute the payment, delivery receipt and could even update the online shop status (online shops).
Some researchers predict Blockchain playing a major role in a logistical chain. In the nutshell blockchain, smart contract technology allows automated transaction based on a number of fulfilled conditions. Example Pay the courier delivery fee> If delivered within 30min. >If delivered within 60min - pay 90% delivery fee. etc. But in my opinion, last mile delivery still need a single node to trigger the transaction. And Blockchain technology might not be a perfect match.
Why the hell we are joining such a hot party?
I think we are doing 3 things completely different.
Biggest network of stand-by carriers. Free for the shoppers. Consumer empowered delivery. And the last feature is, in my opinion, the biggest game changer. I don't know any company that will allow me to trigger delivery when I want.
I hope that consumers have the same opinion!!??
Would you like to join the discussion or contribute to the system or block-chained last mile delivery system, feel free to join our next meet up or simply have a coffee in the Factory Berlin.