Increasing urbanisation is making the last mile of delivery more complex and critical for the success of e-commerce companies, according to new research and market research.
With over 600 million more people forecast to live in urban environments by 2030 and new technologies creating opportunities for both service enhancement and disruption, online retailers and their logistics partners are being challenged to embrace bold new approaches in order to survive and compete. In the white paper, Shortening the Last Mile: Winning Logistics Strategies in the Race to the Urban Consumer, DHL and Euromonitor have identified the four main trends that are shaping urban last mile transportation –localised delivery, flexi-delivery networks, seasonal logistics and evolving technologies –and ways in which companies can adapt their supply chains to the changing market environment and achieve competitive advantage.
“The last mile is increasingly becoming the key battleground in the e-commerce supply chain, and companies will have to develop targeted strategies in this area to compete effectively. It’s not just about transportation, but about companies’ overall approach to managing inventory –getting the right items to the right place at the right time. DHL is developing focused solutions to help e-commerce companies reach their end customers quickly and efficiently, from using machine learning to better route shipments within cities to adding more automation to our delivery networks,” Katja Busch, Chief Commercial Officer, DHL said.
The white paper found that the major urban trends all create various challenges in terms of cost, service impact and organisational strain. For example, the growth of seasonal logistics as a result of increasingly popular holidays and promotional days such as Asia’s Singles’ Day or national Cyber Days, places significant pressure on logistics companies to build up additional capacity and hire resources to cope with short-term volume surges, which can in turn be difficult to predict. Urban customers’ demands for speed and convenience are forcing retailers to overhaul their warehousing networks, replacing centralised networks with local fulfilment and distribution infrastructure, which can require more accurate balancing of inventory.