7 last mile delivery trends for 2021

About 75% of companies in the U.S. have reported that the pandemic has disrupted their supply chain. This is mainly attributed to the COVID-19 pandemic as consumers recorded a significant increase in online shopping. The rapid shift in consumer behavior has put more focus and pressure on the last mile delivery market.

Top trends that will shape the last mile delivery for 2021

1) Contactless delivery

There has been a major surge in contactless delivery since the pandemic. Close to 40% of U.S. consumers prefer contactless delivery due to safety concerns, according to a Salesforce survey. Delivery executives are exploring different ways to maintain safety and continue to offer a good customer experience.

Last mile delivery firms have embraced automated delivery processes via digital solutions like Electronic Proof of Delivery software (e-POD) and digital payments to minimize contact. Companies will need to continue focusing on contactless delivery to ensure complete safety for delivery agents and customers.

2) Drones and delivery bots

Several retailers are looking to experiment with robotic deliveries via various options like drones, robots, self-driving vehicles, and autonomous delivery bots. Retail giant Amazon recently invested over USD 500 million in autonomous technology developer Aurora. In 2019, Alphabet tested Wing delivery drones to deliver parts to ships away from the shore.

Few companies are also pursuing the delivery bot solution for last mile deliveries, while others are embracing autonomous robot delivery providers. However, the new-age delivery solutions will need approval from local governments and undergo regulations before they can be put in use.

3) Increase in urban warehouses

As customers start demanding same-day deliveries, e-commerce companies will need to start building warehouses and hubs closer to the city. It has become essential to take advantage of the urban warehouse space to get instant access to products for fast customer deliveries. This not only reduces transit time but also makes access to delivery agents and laborers easier.

With lesser people visiting physical stores, more retailers are using them as micro-fulfillment centers and delivering orders from the store. According to a WSJ report, Amazon is said to be in discussion with mall owners like Sears and J.C. Penney to turn them into fulfillment centers.

4) Insourcing last mile deliveries

Several companies are using their own vehicles for last mile delivery instead of outsourcing them. Some of them are also developing their own local delivery services by using their own fleet of vehicles or a hybrid fleet to fulfill deliveries. Owing to the sudden spike in last mile deliveries, e-commerce firms have also started to use their trucks for local deliveries. However, there are several companies that need to rely on outsourced delivery services.

5) Smart tracking with location intelligence

Retailers and logistic companies are embracing technologies like location intelligence (LI) to improve their last mile delivery. Features like real-time tracking, route optimization, and visibility, among others, are helping them with seamless deliveries and fleet management. The right LI platform helps companies keep their customers informed about the exact location of an item in transit by offering more visibility. Retailers can also leverage LI to monitor weather patterns and look for optimum delivery routes.

6) Faster fulfillment

Amazon is responsible for revolutionizing one-day and same-day delivery services. As consumers are looking for faster fulfillment, it has become important for shippers to move products quickly and focus on logistics. Faster processing of shipments has become the latest norm, thereby adding pressure on delivery planning. A McKinsey & Company report says that millennial consumers are willing to pay a premium up to 30% for same-day and guaranteed delivery.

7) Drivers turning into a salesman

Retailers need to explore new ways to reach more people and convert them into customers. By leveraging big data, they can predict customers’ possible likes towards a certain item. Drivers can take up the role of a salesman and gradually increase sales. This new trend has given a push to the concept of a mobile warehouse.

This medium of delivery is still in a nascent stage and can be more applicable to food-related orders. However, there are several challenges that retailers can face while dealing with orders done directly from the mobile warehouse. Some of the common challenges are – how will drivers process payments and take care of accounting? What is the procedure if consumers want to return a purchased item from drivers?

Final thoughts

The last mile logistics market is slated to see exciting times ahead with smarter technologies that will expand the scope for first and last mile deliveries.

Dista is an AI-enabled location intelligence platform that offers delivery management software to manage and automate last mile deliveries.

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