Watch out! The last mile sector is unstoppable. If you don’t want to be “run over” by its rhythm and the demands that come with it, stay tuned! To avoid this, there are digital solutions that take essential variables into account, such as spatial ones. These are alternatives that faithfully follow the current trends in this sector. In the next few lines, we are going to take a look at this panorama, its perspectives, trends and everything that Location Intelligence has to offer for its evolution. Let’s get started!
The last mile boom has been with us for a long time. There is a very detailed report that confirms it, The Future of the Last-Mile Ecosystem, an investigation made by the World Economic Forum.
According to this report, demand for last mile deliveries will grow by 78% by 2030. The main reason for this situation is the increase in e-commerce, which has been tripled in the period 2014-2019 and it is expected to increase in 2021 by some 2.1 billion people. This represents an annual growth of 17%.
The main driving factors of this situation are:
- Greater urbanization.
- The growing purchasing power of the middle class.
- The increase of the world population.
- The wide range of products available.
- The emergence of new digital business models.
- The technological advances that allow instantaneous delivery, on the same day and in a defined time.
What are the main consequences? The World Economic Forum identifies the following ones:
- Vehicles in cities will grow by 36% in 2030.
- The increase in related traffic will bring a 30% increase in emissions in the world’s 100 largest cities.
Given this reality, the application of technological solutions will bring a series of benefits:
- Traffic and emissions can be reduced by 30%.
- Delivery costs will be 25% lower.
In order to face this reality and take full advantage of it, we analyze what future the last mile businesses and the participation of Location Intelligence in all of it are headed.
Next steps for last mile delivery
Trends as a result of customer requirements
Customers’ lifestyle rules. Therefore, adapting to it is a matter of survival. In addition to the increasingly powerful and immediate deliveries in the day, there are more consumer trends in the last mile that you should not miss.
One of the most requested is to offer alternative delivery locations and time flexibility. One example is the case of the multinational UPS and its My Choice service. Through this service, its customers can choose to modify delivery addresses, make deliveries to predefined points (the UPS Access Points, which are mostly neighborhood stores), choose when they prefer to receive the package or hold a delivery until they can pick it up.
Another trend that is in high demand due to the current situation are the smart lockers. Through them it is not necessary to be aware of delivery schedules, but the collection will be made by the customer when it deems appropriate. In this way, direct contact with the delivery person is also avoided, eliminating the risk of contagion. Big companies of the sector, such as Amazon, already use them regularly.
Nor should you forget that the customer continually asks for information on the status of their order. This allows you to better organize your day. This information will be in real time (“What’s happening with my order?”), geolocated (“Where is my package?”) and predictive (“When will it arrive?”).
The industrial environments, works and constructions deserve a special mention. And just in time deliveries are key to their results. This is due, on the one hand, to the need to supply materials and, on the other, to the cost savings associated with storage.
As important as a good delivery service, is an impeccable return service. Something that is often forgotten by last mile companies.
Trends based on environmental care
Society, governments and companies are taking very seriously the actions for the care of the environment and air quality. More and more cities are sanctioning the most polluting vehicles and restricting their freedom of movement.
This means that many companies in the last mile are electrifying their car fleets. With this measure they avoid paying penalties and higher taxes, and can access all urban areas, whatever time of day it is.
In these cases, Location Intelligence contributes by providing the optimal location for electric vehicle charging points. For this purpose, origin-destination matrices are used, which study the most common routes, and the location of existing charging points and areas of the electricity network with potential to be so is analyzed.
Trends related to route optimization
When we talk about improving last mile services, it is normal that the first thing you think about is making the trip faster. This is one of the decisive factors. However, we must think about more than just covering the minimum distance possible.
Here, equally important aspects come into play, such as the time invested in finding an area for loading and unloading (sometimes longer than the journey itself), and the time required to deliver the goods on foot from the moment the delivery man leaves the vehicle.
It is also very important for last mile companies to take into account the expenses derived from each delivery. This is a key issue in choosing the best delivery strategy, which includes delivery options according to the area, the possibility of subcontracting or dynamically defining prices, among others.
To consider all these variables, last mile companies are opting for intelligent analysis of large amounts of data. These solutions work with information related to traffic in real time, availability of loading and unloading zones or the charging of electric vehicles. This way, they can plan their routes efficiently.
Location Intelligence, what does it offer in the last mile?
We just gave you a few tips on how location intelligence optimizes delivery management in the last mile. To complete it, nothing better than putting on the table some real cases of application.
First of all, differentiate two very common situations. One of them is when we can plan deliveries with a certain margin of time. For example, when they are set for the days following the order.
The other situation, more and more common, is the need to distribute the goods immediately from the moment the order is placed. In these cases, optimizing the delivery is a more complex and risky problem, since there is less information and time to solve it. In spite of these difficulties, solutions have been developed that give a very favorable response.
As an example of last mile solutions that demand immediate response, we have the case of the application for the taxi service in Madrid. With this application, and based on different data sources (such as real-time traffic) we developed in DOTGIS an app specially designed for cab drivers and users.
With it, we manage to optimize the routes, paying special attention to key points, such as cab ranks, hospitals or cultural centers. Moreover, for the passengers it allows them to follow these routes live, as well as benefits such as knowing in advance the price of the race.
Example of the developed solution for Taxi service in Madrid:
For last mile deliveries that have a longer planning time, we can comment on the case of Correos and DOTGIS. During this, we collect and work with the millions of data that are the result of their daily work. Information regarding delivery hours, absences for collection… all distributed by zones.
This is how we shaped a Big Data platform with which we managed to optimize deliveries, manage resources efficiently and anticipate events.
Finally, we will talk about one of the main European initiatives aimed at developing urban logistics and its infrastructure, the Senator Project. Through it, governance programs will be developed in aspects such as:
- User demand.
- Transport of goods.
- Urban infrastructure.
Senator’s final goal is to shape a collaborative system that works like a control tower. This will result in a dynamic planning based on these variables, improving the decision making process in real time.
Talking about Spain, several public and private institutions have been selected to participate in the Senator project. Among them is DOTGIS. A challenge that fills us with motivation and with which we cannot be more excited. Throughout the 4 years of the program, we will keep you duly informed of its progress.
Example of the developed solution for Correos:
There is no doubt that we live in a reality in which last mile companies cannot move forward without the support of technologies based on geolocation. This statement is applicable to any activity within the sector. Whether it is for the delivery of goods or the transport of passengers, to attend a service planned in advance or one that requires immediate completion.
Whatever the requirements are, Location Intelligence is there to meet them one by one. At DOTGIS we are here to listen to you and propose the solution that you and your customers really need. What if we bring it to life?