Can New Technologies Really Help Overcome the Challenge of Last-Mile Delivery?

By:
Rakuten Super Logistics
Oct 30, 2019

The last mile is the biggest challenge retailers face in delivering goods to the end user. And today, the demand for quicker, more efficient delivery systems is at an all time high with the continued rise of online shopping. Retailers are now delivering everything from big ticket items to weekly household deliveries.

Consumers have growing expectations. Not only are retailers expected to deliver within a couple days of placing an order, consumers expect this ultra quick turnaround at little to no cost to them. To make matters worse, businesses who wish to remain competitive see fast, free shipping as a necessary offering, which means finding new tactics to keep costs down and be able to retain a profit.

This situation presents eCommerce companies with a growing problem. Even larger companies are reconsidering long-term partnerships with couriers.

What are the Challenges of Last-Mile Delivery?

Companies have long faced challenges with last-mile delivery, many of them outside their control. Companies cannot control the frequency of orders, they cannot control traffic, and they cannot control the distance between the warehouse and the customer. Some companies have resorted to using third parties that employ freelancers, such as the restaurant delivery service UberEats. Others are turning more to USPS, which can offer cheaper last-mile service than the couriers, because they are delivering to that address anyway-- Amazon, for example, makes heavy use of USPS.

Possible solutions to the last-mile challenge may be emerging technologies that are starting to come on the market.

Self-Driving Trucks

As of now, the self-driving technology in place is better suited to highway driving (with talk about drivers waiting for trucks at the off-ramp). However, Waymo, which is already implementing self-driving taxis is looking at expanding to last-mile delivery vehicles. Self-driving trucks are currently being touted as a way to deal with driver shortages.

Such driverless vehicles could also be electric. And for situations where true self-driving is not cutting it (there have been incidents involving self-driving vehicles failing to see pedestrians), remote control may allow a single driver to monitor and take over several vehicles if necessary.

Robots

One problem with self-driving trucks for last-mile delivery is that you still need a person to carry the package to the door... Or you could use a robot. FedEx and Amazon are testing robots that can be deployed by a van and take the package right to the door. In dense, walkable cities, the robots might even come all the way from a local warehouse.

One concern is that delivery robots may add to sidewalk congestion, especially in cities that are dealing with electric scooters and rental bikes, and the issues those are causing for pedestrian safety. However, some use of robots is inevitable in the future.

Drones

The FAA is now issuing permits for drone delivery to companies, including UPS and a specialist company named Flirtey.

Drones can carry surprisingly large packages (the UPS permit allows for large cargo drones that can carry packages over 50 pounds), avoid traffic, and are excellent for what is called point-to-point delivery-- meaning deliveries that come from a retail location or restaurant to the home. Pizza, anyone?

Current systems allow one operator to control as many as ten drones, and fully automated drones are being worked on. Drone delivery is of particular interest to hospitals, as it may allow for things like transporting equipment to an ambulance en-route or faster transport of organs for transplant.

A major obstacle is flight restrictions that may preclude drone delivery in some places. These places may, ironically, include Amazon's new HQ2 in Northern Virginia, due to its close proximity to both the restricted airspace over DC and National Airport. New York may be another place where drone delivery proves hard.

Smart Shipping

All of the mentioned possible solutions involve new hardware, but there's also a lot of work being done on new software. New tracking technology is vital. Coming out of customer desire to know the status of their package at all times, technology now allows tracking of temperature and humidity to help ensure that packages get to their destination intact.

More important for last-mile are technologies that determine weather and traffic in real time, allowing trucks to avoid traffic jams, floods, construction, and other roadway problems that may arise.

Tracking technology is also allowing for smooth tracking of packages even when a different company is used for long distance shipping and the last mile. It is very common for packages to be shipped to a local warehouse by one company and then out by another, which has historically made it hard for tracking to work.

Conclusion

All of these solutions may revolutionize last-mile delivery, although none are really ready for prime time (just yet). Companies benefit from looking at software solutions for now, such as improved package tracking and smarter routing systems that make for more efficient routing and help drivers avoid problems.

In the future, however, these technologies may be viable solutions. There are regulatory hurdles which have to be overcome, but the reduction in labor associated with the use of self-driving vehicles and drones is vital in a time of driver shortages.