Until a year ago, customers delighted in next day courier service for their online orders.
However, with the multifold rise in the volume of necessity-based products during the COVID-19
pandemic, the customer demand window has shrunk from the next day to the same day and
even 30 minutes in case of certain deliveries. Customers are becoming increasingly impatient
and want delivery in the shortest possible time.
If e-commerce companies can’t fulfill customers’ expectations using courier services, they are
ready to shop in brick-and-mortar stores to meet their urgent delivery needs. There is no doubt
that the demand patterns have changed drastically since the pandemic across the globe,
including in the GCC market. The goal of e-commerce companies is to gain customers over
physical stores by offering on-demand delivery to customers in the shortest amount of time. It
has become a major competitive differentiator for them.
EZ Dubai Report 2021 highlights that the e-commerce market in the MENA region grew by 15%
from 2020 to USD 31.7 billion in 2021. It is estimated to become a USD 18 billion market in
absolute value terms over 2021-2025. UAE is at the forefront of this massive growth in the
MENA region. The UAE market size reached USD 5 billion in 2021, nearly doubling from 2020,
and is expected to surpass USD 8 billion by 2025. Consumer demographic and behavior are the
primary driving factors behind UAE’s e-commerce growth:
With GCC driving the e-commerce boom in the Middle East, local 3PL logistics companies and
delivery partners also now face a herculean task to manage same-day or rather immediate
deliveries with complete control of the cost. This had led Jeebly to revolutionize the category by
changing its company DNA by calling itself a ‘Fast Mile Delivery’ company rather than the Last
Mile delivery company. Jeebly CEO Raman Pathak envisages a paradigm shift in the business
processes of e-commerce logistics and an increase in the adoption of cutting-edge tech-enabled
processes to overcome the limitations of traditional operational logistics.
Despite the availability of automated routing solutions, many last mile solutions providers rely on
the drivers for their ground-level knowledge of the delivery location. As a result, drivers try to
optimize self-projected routing solutions. The manual routing process makes it difficult to get
visibility across 40-50 delivery locations.
Even if the logistics companies use the cloud routing software, it may not take into consideration
real-time conditions such as traffic, weather, road closures, etc. The route mapping tool may
also miss situations where a driver can just walk across the road to the delivery point, but the
vehicular route might show a U-turn probably a few hundred meters away. Such inefficient route
planning not only increases the turnaround time of delivery but also undermines the utility of
cloud routing systems. And that’s not all, as customers also demand the convenience of last
mile tracking so they can stay updated about the exact location of the shipment.
Most courier service companies have system integration with e-commerce ordering platforms to
receive customer details and addresses. If the address is incorrect or incomplete, it leads to
more miles, time, effort, and cost for the entire ecosystem, especially for the last mile solutions
providers.
Increased demand for the same-day delivery tagged alongside an increase in vehicular traffic
and congestion works against TAT. The security process at entrance gates in urban residential
and commercial areas are a few more roadblocks that come in the way of the last mile solutions
provider’s success.
The concepts of JIT and Kanban made Toyota a world-renowned success. The supply chain industry has tried
implementing JIT to cut down idle inventory at each leg. However, the new wave of consumerism via online platforms along with same-day delivery has compelled e-commerce platforms to store more inventories, especially for fast-moving items. This leads to additional cost, forecasting time, storage requirements as well as inefficient delivery tracking for the entire value chain, undermining the advantages of JIT.
It is imperative that last mile solutions providers forecast and plan their routes efficiently to
optimize deliveries. Deploying cloud-based route planning software or online tools for vehicle
and performance tracking in real-time and add-on capabilities such as geo-fencing and off-route
alerts can help optimize the overall delivery performance.
Location scheduling and last mile delivery tracking by customers ensure their availability at
the delivery location thereby reducing the bad address attempts. However, companies must use
this feature judiciously because a zone change by the customer can still lead to confusion and
delayed delivery. One of the ways to handle this scenario is to allow customers to update their
location before the consignment is out for delivery (OFD). This will massively improve fast mile
delivery.
Manual segregation and dispatching of consignments, especially of bulk volume, make it challenging to stay abreast with swift geopolitical changes. The software-based dispatching system automates the entire process, saves time, and provides a consistent fast mile delivery matrix. However, it is recommended for logistics companies to do their homework in terms of capacity planning layout and volumetric measurements of shipments for auto dispatching.
Matching the pace of the e-commerce industry with the rising consumer expectation is the need of the hour. With most companies dealing with competitive products, delivery performance including the ease of last mile tracking plays a pivotal role in defining the consumer experience. Fast mile delivery can be considered the latest revolution in the last mile industry that is pushing the logistics benchmark of delivery from a few days to a few hours. The hyperlocal industry has paved the way for e-commerce to realign its inventory placements and delivery parameters. Innovative solutions including micro hubs, milk run, and tech-enabled routing will continue to be the key pillars of the change.
