PANDEMIC LOGISTICS WEB VERSION: Click Here
Negotiating the last mile delivery challenge during the pandemic
By Ken Fleming, president of Logistyx Technologies W
ith the pandemic increasing online order volumes exponentially, managing last mile fulfilment is now
harder for both online retailers and the carrier companies with which they partner.
The increase in orders is stretching retail fulfilment capacity to the limit, which makes meet delivery deadlines more challenging. And retailers’ costs are increasing because some carriers have raised their charges.
The crisis is also forcing people to buy a much wider range of products online than before. They are choosing to buy furniture and appliances on the web, when in the past, they might have gone to a physical store, for instance. And while this feels like a win, it does bring some difficulties: it’s harder to store and process these bulkier items using existing warehouse storage racking and conveyor systems.
Plus, with bigger items, each van will hold fewer parcels – impacting both cost and efficiency.
At the same time, there has been an increase in “white glove” last mile delivery services, with items such as furniture and appliances delivered, assembled and installed in the customer’s home. The challenge is that while brick and mortar retailers may have provided these services for a long time, they used to charge an additional fee, and have set delivery days with large – often all-day - delivery windows. Now, many customers expect this kind of premium service with the same f lexibility as their small parcel deliveries – and for free.
Use omnichannel to bring inventory closer to the customer One way some retailers are tackling the last mile challenge is shortening the delivery
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journey as much as possible by holding stock closer to the final customer destination. They are using an omnichannel inventory approach to increase the number of inventory sources. Rather than relying solely on huge national distribution centres, they are using brick and mortar stores as multiple mini warehouses.
This trend has been fast forwarded by the pandemic. For example, during strict lockdowns, some non-essential retailers in Europe kept physical stores closed to the public while allowing a skeleton workforce on-site to process online orders for parcel deliveries, with shipments picked up by carriers or couriers at the back door. One global fashion retailer with which Logistyx works has been utilising 21 per cent of its stores as makeshift fulfilment centres and expects this to increase.
As brick-and-mortar retailers experiment with different ways to connect with customers and keep team members employed, another fat growing trend is click and collect or Buy Online Pickup Instore (BOPIS). BOPIS is providing a win-win for both retailers and customers impacted by the pandemic. Shoppers get products quickly and in person, while retailers keep customers coming to their stores and interacting with their brands – and allowing shop workers to stay in employment even though footfall is lower than normal.
A key requirement for successful omnichannel fulfilment is a digitised supply chain with real-time visibility of inventory, whether stock is located in stores, warehouses or centralised distribution centres. If, for example, someone buys a jumper from a shop, then one less product will be available for online delivery, and the retailer’s systems need to be able to immediately track this. Without an up to date picture of inventory across all locations, omnichannel is too difficult and complex to achieve.
Direct Commerce |
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