The digital world has created many advances across industries, demographics, and regions. Technology has made it easy to achieve just about anything with a click of a button or swipe on a screen. Due to the recent pandemic, technology is even more vital during this time for online shopping. In Australia, “April 2020 welcomed more than 200,000 new shoppers to the online space. Of these, over a third (35.5%) made an online purchase more than once, and 16.7% shopped three or more times .”
With increases in overall Australian parcel volume and population density, logistics carriers are dealing with pressure to deliver on time to individual homes or places of work. “While home deliveries made up the largest portion of deliveries in April 2020, we also saw strong growth in alternate delivery options, up 30% YOY, and we expect this growth to continue ."
However, the increased demand spikes a problem for the retailers and carriers in eCommerce. Merchants face the challenge of adjusting strategy to fulfil consumer’s expectations and carriers face the challenge of delivering goods on time. The last mile delivery is now being disrupted by unprecedented conditions of high-density orders and consumer demand due to COVID-19.
In this post, we chat about how the last mile delivery affects each player in the eCommerce industry and how the last mile can be solved through Collection Point Networks. As the online retail market continues to grow, the last mile delivery problem will affect more retailers and carriers unless the market becomes disrupted with new players to circumvent this problem.
What is the last mile delivery problem?
“Last mile delivery is the final logistics stage in the order process. It takes place after the products have been received, placed in the warehouse, sorted, picked, packed, and shipped to the appropriate distribution centres .” So, what happens to the retailer and carrier involved in fulfilling the user buying experience?
Say a carrier has 100 parcels to deliver each day and half of those consumers are not home to receive the parcel. Then the carrier needs to return to the locations they missed the following day. The average cost to the carrier is around $10USD for missed deliveries . The consumer suffers from missed deliveries about 30% of the time where home delivery is the only option.
Three challenges faced by retailers in the last mile
In eCommerce today, retailers are dealing with similar issues across the industry.
Three challenges faced by logistics providers in the last mile
Three business effects of a limited delivery system
As mentioned above, the retailer and carrier deal with different consequences to the business during the last mile. When expectations are not met for the consumer, the business can lose a customer and profitability for the business.
How collection point networks help solve the last mile
Limited delivery options routed to individual homes can create the chances of a missed delivery. What options can logistics providers use to be more efficient in the last mile?
Well today, the new kid on the block enters the market. Enter collection point networks, sometimes referred to as alternative collection points or pick-up and drop-off (PUDO) locations. Pick-up and drop-off locations enable retailers to supply more choice, convenience, and control to their customers by enabling alternative ways to receive a parcel. Additionally, logistics providers can support their schedule by dropping off parcels in bulk and ensuring successful deliveries using the network.
Benefits of collection point networks
In Australia, pick-up and drop-off collection points are becoming more popular for the merchants and consumers to have more choice in where they receive or return parcels.
Solutions for the retailer
Solutions for the logistics provider
Solutions for the consumer
HUBBED collection point network
The HUBBED PUDO Network helps solve the last mile delivery problem and ensures more delivery choice for the retailer, reduced cost to carriers, and more control for consumers.
The HUBBED collection point network works with local companies nationwide to provide delivery, pick-up, and drop-off locations. Extended hour HUBBED locations include convenience stores, service stations, self-storage centres, and smart parcel locker sites. By providing alternative collection points, consumers have more options to work around their schedule to retrieve a parcel when it best suits them.
Benefits of the HUBBED collection point network
The HUBBED PUDO network increases order density, reduces reverse logistics costs, and supports the logistics and eCommerce industry's efforts in reducing carbon emissions.
Take a look at our recent blog post and learn more about how HUBBED operates in Australia.
Improving last mile delivery is crucial for both carriers and eCommerce merchants. PUDO network adoption and technology optimisation will improve the consumer experience as parcel volumes continue to grow.
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 Australia Post, 2020 eCommerce Industry Report: https://bit.ly/3eCgdpo
 Optima Route, What is Last Mile Delivery and How to Optimize it in 2020: https://bit.ly/3h2fZJS
 Capgemini Research Institute, Last-mile delivery executive survey, October–November 2018: https://bit.ly/3j22xYl
 Fix Last Mile, Last Mile Delivery for eCommerce: Challenges, benefits, and future implications: https://bit.ly/2B17jnA