Jeebly | Last-Mile Delivery Services

Categories
blogs

Fast Mile Revolution in the Last Mile Industry

Fast Mile Revolution in the Last Mile Industry

Author: Vikrant, Head of Operations


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, 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:

  • 22% of UAE’s population is below the age of 25, with one of the highest rates of internet usage, not only in the GCC but globally.
  • 34% of UAE consumers shop online weekly.
  • UAE has a higher online transaction size on average (USD 122 in 2019-20) as compared to both emerging (USD 22) and mature e-commerce markets (USD 76).
  • More consumers purchased online across all categories during 2021 as compared to 2020, with an average of 75% of people typically purchasing online in 2021 vs 72% in 2020.

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.

Challenges That Come into Focus As Customers Expect Same Day Delivery

1. Ineffective Routing Solution

Despite the availability of automated routing solutions, many logistic companies 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.

2. Incorrect Delivery Address

Most delivery 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 logistics services companies.

3. Shrinking Turnaround Time (TAT)

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 company’s success.

4. Just In Time (JIT) Inventory Process

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, and storage requirements for the entire value chain, undermining the advantages of JIT.

Agile, Flexible, and Scalable Solutions To Fast Track the Fast Mile Deliveries:

1. Effective Route Modeling

It is imperative that logistics companies 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.

2. Real-Time Shipment Scheduling

Location scheduling by customers ensures 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.

3. Alternate Delivery Locations

Amazon has leased 39 car parking services in central London to convert them into micro hubs. The e-commerce giant also offers Amazon Hub Locker facility in certain US locations for free pick-up and drop-off service for its customers. These are brilliant examples of alternate delivery locations.

Alternate delivery locations such as micro hubs, local stores, or even drop boxes can convert the last mile into Fast Mile Delivery. It is a quicker option but likely to incur additional costs to the company. Hence, logistics companies should adopt this approach based on the success improvement ratio.

4. Auto Dispatching and Segregation

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 some homework in terms of capacity planning layout and volumetric measurements of shipments for auto dispatching.

5. Last Mile Crowdsourcing

The core success of last mile delivery lies in the density of deliveries as it saves the travel time and dead kilometers significantly. So, the logistics companies need to aggregate both the supply and channels for an effective Fast Mile Delivery solution. Channel aggregation here refers to the utilization of unused delivery sources in local areas including local grocery or pharma delivery manpower. They are able to combine their resources and cover the last mile during their free time on a per successful delivery basis.

6. Micro Warehousing

It is not feasible and cost-effective for e-commerce companies to transfer consignments from the mother warehouse to each location for faster delivery. Hence, it has become extremely important for them to stock inventories at multiple micro hubs. A couple of e-commerce aggregators have put the onus of maintaining minimum order quantities at multiple locations on their sellers. Even several logistics companies are introducing shared micro hub services across the region. Store-based deliveries are also a welcome step for the e-commerce industry toward changing last mile delivery to Fast Mile Delivery.

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 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.

Categories
blogs

Customer Centricity: Buzzwords or Strategic Intent!

Logistics around
the globe

Customer Centricity: Buzzwords or Strategic Intent!​

Author: Ravi Tharoor, Chief Strategy & Commercial Officer

The theory of customer centricity or customer centric organization was born in 1954 when Peter Drucker in his classic “The Practice of Management” said “it is the customer who determines what the business is, what it produces and whether it will prosper”. Though a focus on customer was a central theme of retail businesses since beginning of 20th century when Harry Gordon Selfridge proclaimed “customer is always right”, it was during the 1990’s that the concept of customer centricity began to develop as a component of market orientation.
Since then Academics, Management Consultants, CRM Sales Gurus and others have written and prescribed plethora of ways and means to be customer centric. But as my title queries – are they merely buzzwords or can an organization or a small business or even a single business operator/owner truly care about its customers and put them at the very center of their focus as the term “customer centric” suggests?
I submit that they can, if they treat customer centricity as a strategic intent and not just a marketing phraseology. Gary Hamel and C.K.Prahlad in their brilliant article defined strategic intent as an obsession to win at all levels of an organization and sustain it over a long period of time to achieve global leadership. I am borrowing from them to convey something far simpler as in making customers happy and keeping them happy.
In my business experience spanning several continents and industry segments, three principles have helped consistently in attracting, retaining and maintaining happy customers:
Be genuine: Don’t let the salesman or saleswoman in you oversell yourself or the product/service. Humbleness and humility are the key to winning over the person on the other side of the table regardless of the type of product or service you are pitching. Listen (don’t forget to take notes!) a lot more so you understand your customer and their business and don’t be afraid to say “I don’t know” if you really don’t know! As Ozan Varol explains in his book “How to think like a Rocket Scientist” – when we utter the three dreaded words “I don’t know” – our ego deflates, our mind opens and our ears perk up!
Be truthful: Do not lie to your customers or prevaricate! You may embellish but not to the extent of being proven completely untrustworthy. State the correct facts and do not be afraid to discuss failures with other customers but at the same time point out what you or the organization has learnt from the failures which would help not repeat the same mistakes and make improvements in your product or service. There will always be unhappy customers but as Bill Gates said “your most unhappy customers are your greatest source of learning”.
Be caring: Caring is not exclusive to Hospitality or Healthcare! You must show and practice a great degree of care to your customers by being concerned about their business, the impact of your service levels or your products in their success. Do not be superficial and always incorporate a personal angle by enquiring about their families, understanding their hobbies and interests, read up on their culture, pick up some basic sentences from their language, try their cuisine etc. This will create a conversational topic and a connect that will help you build a lasting relationship beyond the business scope.
Peter Kaufman in his famous speech on Multidisciplinary Approach to Thinking, highlighted several nuggets of wisdom that reinforces my principles but, undoubtedly, more eloquently. I take away three and I quote them below:
  • Keep it simple: So, if you think about things beings complex as being sophisticated like most people do, you think the more complex it is, the more sophisticated it is. Albert Einstein once listed what he said were the five ascending levels of cognitive prowess. Everyone wants to be level one. Right? No one wants to be at level 5! Wait until you hear what these levels are, it’s going to be a revelation! So number five he said, at the very bottom, was smart. The next level up, level four, is intelligent. Level three, next up, is brilliant. Next level up, level two, he said is genius. What? What’s higher than genius? He must have that backward. No, he doesn’t. Wait until you hear what number one is according to Albert Einstein. Number one is simple. Simple transcends genius!
  • Be the List: Our entire lives we are on a quest, an odyssey, a search for an individual or business partners you can 100% absolutely and completely trust. But who is not just trustworthy, but principled and courageous, and competent, and kind, and loyal, and understanding, and forgiving and unselfish. Everyone has this list in their heads and every single one of your interactions with others, be the list! You do this with the other human beings you encounter in life. They are all going all in, and not because it’s your idea. Most people spend all day long trying to get other people to like them. They do it wrong. You do this list, you won’t be able to keep the people away. Everybody’s going to want to attach to you. Because you are what they have been looking for their whole lives! Kaufman refers to this as a twenty-two-second course in leadership. No need for B Schools, or books or motivational speakers!
  • Mirrored Reciprocity: Kaufman’s Elevator example is brilliant for its simplicity! You are standing in front of an elevator. The doors open. And inside the elevator is one solitary stranger who you have never met before in your whole life. You walk into the elevator; you have three choices for how you are going to behave as your walk into this elevator. Choice number one: you can smile and greet this person. 98% of the time the person will smile (or may be not) and greet you back. You can test it. Choice number two: you can walk in and you can scowl and hiss at this stranger in the elevator. And 98% of the time, they may not hiss back at you, but they will scowl back at you. And option number three. This is where the wisdom comes. You can walk into the elevator and do nothing. And what do you get 98% of the time? Nothing. It’s mirrored reciprocation. You want to go positive; you want to go first. There is a big obstacle though! Daniel Kahneman, the Noble Prize winner in Economics (more specifically Behavioral Economics) explains this as a huge asymmetry between standard human desire for gain and standard human desire to avoid loss. Why do people not go positive and go first when there is a 98% chance that one is going to benefit from it and only a 2% chance that one is going to fail or feel horrible or lose face, and all the rest of that? That’s why we don’t do it – the thought of the 2% negative!

At Jeebly, our endeavor has been to nurture and sustain relationships and have experienced a great degree of success, judging by the WOM references we get. There have been failures but not because of how we have managed the association. The pandemic has surely made relationship building more complex since virtual meetings do not give the same connectivity opportunity that physical meetings do but we try! As more businesses return to normalcy, we are carefully accelerating the physical meet option to build on the foundations we have laid.

Categories
blogs

5 Reasons why Reverse Logistics is important for your Business

Logistics around
the globe

5 Reasons why Reverse Logistics is important for your Business

Author: Vikrant, Head of Operations

Importance of Reverse Logistic

In this pandemic-stricken world today, e-commerce business has grown leaps and bounds as compared to the traditional retail businesses. Last-mile deliveries have become an important norm due to changing consumer habit from shopping in a store to conveniently getting your orders with tap of a button. According to Brian & Company, the e-commerce sector in the MENA region is expected to reach US$ 28.5 billion by 2022, which is a major shift from its US$ 8.3 billion valuation in 2017. This upsurge in the industry has led businesses to update their processes and look for convenient solutions in their logistics processes.

However, e-commerce business is maturing with every passing day and are coping to retain the customers with increased customer satisfaction and process optimization. While it is quick and convenient to order online but customers are facing issues over sizes, quality, damages and look and feel of actual product in online shopping due to which the return of shipments has posed a major challenge for all e-commerce companies. With every return there is a customer dissatisfaction, delay in receiving actual order, held up payments and a few more negatives to count upon. While the companies are consistently working on improving the quality and user-friendly interface to reduce the return share, but the primary importance remain in the quickest possible return process.

The return process is a sheer wastage in terms of cost for the company in the value chain and thus needs to be looked at very carefully. Companies have realized that an efficient reverse logistics strategy within the supply chain encourages profit-generating opportunities for companies. Here are a few more reasons why reverse logistics are so crucial to businesses.

Improved Customer Loyalty and Retention

Improved Customer Loyalty and Retention

While return is always associated with customer dissatisfaction, with effective process it may be converted into an opportunity to build a better customer loyalty. The longer a reverse pickup takes more is the agony added to your customer whereas a quick return attempt increases the level of trust in the customer and pushes him/her further to stick to the platform. Many companies have now moved to a no question asked policy for the returns just to boost the customer’s confidence.

Many companies have started seeing the return percentage as an increasing trend of their relationship with the customers and it is a very alike development with what happened with Fashion retails when they started capturing footfalls as a happy number where customers were encouraged to try the clothes as much as possible.

Improved Inventory Optimization

While improving every step of the supply chain, an effective reverse logistics solution can significantly impact the asset recovery of a business and, as a result, positively contribute at an operational level as well. From the time a customer raises a return request to such time the product has been returned to the seller/company it stays as a dead inventory in the chain causing wastage in cost and inventory. So, apart from customer satisfaction a quick return also adds the opportunity of the return product to be resold or treated as per the status.

Improved Transparency in value Chain

Reverse shipments allow a company to closely monitor the quality of the product and high return rate acts as an alert to relook into the quality. Also returns due to sizes issue acted as a catalyst to improvisation with features like size charts, size guides and virtual trials. Such continuous improvements in the UI helps in attracting better traffic on the platform. Also, companies can identify the quality sourcing partners with simple data analytics to reduce returns.

Improved ROI and sustainability

A cost-effective reverse logistics system can not only help the company reduce it’s return cost, but the speed of returns can further help in customer retention and improved revenue. Reverse logistics sometimes is being considered as a dead cost and is not prioritized by the e-commerce companies, but one must remember that while half of the customer experience is drawn by the web interface and products, balance 50% of the consumer life cycle consists of the fulfilment and logistics.

Operational Optimization

With return and replacements becoming an unavoidable menace in the ecommerce business it is important to look at a cost effective and optimized reverse logistics solution. There are several 3PL logistics companies who have developed significant expertise in reverse logistics, especially in MENA region companies like Jeebly provide as quick as single day return facility. In our next blog we will also understand how some of these companies have developed effective network clubbed with their first mile fleet to offer a cost-effective solution to the e-commerce companies.

Along with this, there are many more reasons which go a long way in proving the necessity of a streamlined reverse logistics strategy for a business. So, it is important for e-commerce companies to effectively choose their 3PL partners who have strong and credible network to perform their to and fro deliveries.