First steps to a better last mile for e-commerce

The human element: Do not touch

Today’s small-to-medium-sized enterprises (SMEs) need to enhance communication with all parties along the delivery chain, so that stakeholders can establish when the package arrives and how it gets to the final destination. What’s interesting about last-mile solutions, however, is that, for now, no matter how advanced the technology and communication methods, there remains a critical human element. This can be in the form of delivery drivers with an intimate knowledge of the neighborhood, or it can be customers opting to accept shipments at lockers. Until the robots take over, someone is always walking.

uShip is an online shipping exchange that connects customers – ranging from freight brokers to shippers to consumers – with transportation service providers that engage in either fixed-price, spot-market or auction-based transactions. Their approach, in theory, promotes the most competent delivery company through user reviews. It’s a sort of social Darwinism for the shipping industry. If a delivery company excels at a certain type of delivery, or in a specific area, their ratings rise and senders can choose their services.

This system is similar to platforms like Yelp.com, driving customers to restaurants that consistently win high ratings. “it’s a way to differentiate on not only price, but on service as well,” explained Dick Metzler, chief marketing officer for uShip.

“Brown glove” deliveries, which are B2C packages that are not taken into houses or installed, constitute around 90 percent of the market place. The remaining 10 percent are called “white glove” deliveries, which can cost hundreds of dollars more to deliver and often require customized service.

The challenge with brown-glove deliveries is that residential deliveries are not something that large shippers “want to do, or that they are great at doing. They end up being risky with large trucks in small neighborhoods – think power lines and mailboxes, and tearing up somebody’s yard. Then there are all the bad things that can happen inside somebody’s home,” Metzler explains.

Companies such as uShip are helping the market respond by pairing up less-than-truckload (LTL) carriers with local providers that specialize and have the right equipment for such jobs. “That is where the market is going,” Metzler said.

Will O’Shea, chief sales and marketing officer at XPO Logistics, prescribed a healthy dose of technology to ameliorate final-mile complications like these. “Scheduling, communication and scale are absolutely critical. That takes sophisticated technology.”

XPO’s technology provides real-time updates throughout the delivery process, “because the customer has to be home and the carrier is meeting a specific window of time.” O’Shea also points out that many customers want their deliveries on a Saturday or at a certain time, which requires large-scale resources. Barring that, such deliveries require sophisticated cooperation and scheduling between multiple parties.

Another critical aspect is contracting with qualified and experienced carriers. Unlike uShip, which uses democracy to determine the best provider, XPO vets its last mile network carriers to ensure that they meet strict qualifications. “They have to have the prerequisite skill sets to make the delivery,” O’Shea added.