We’re going through interesting times in the shipping industry, as the last three years show the intense but steady growth in volume’s current and future trends – during the pandemic parcel volumes in the last mile made their corrections and the previous three years show precisely the importance of worldwide logistics in numbers. According to Statista, parcel shipping volumes are expected to grow up to 256 billion units a year by 2027. Within five years the volume of global parcel shipping is expected to rise by nearly 30% if the market conditions match. How are last-mile delivery companies keeping up with the pace and what does that market situation require from them?
The pace of global parcel volume growth affects the workload that last-mile logistics delivery companies face. With the fast inflation that hit in 2022, consumers are more sensitive to any price changes and rises. That doesn’t just mean that they will drastically cut down consumption, but people will do more research and price comparisons to match the spending budget. That results in ordering items around the world, not prioritizing items ordered are produced or sold nearby. That will result in fragmented ordering as consumers will buy items separately from different merchants and that in turn will increase the shipping volume of smaller packages.
To try to keep up with the pace of rising parcel volume, logistics companies are consistently restructuring the last-mile delivery business model approach; restructuring expects more flexibility in that field. The main concerns the logistics sector faces during the increase in workload are foremost rising transportation costs and labor shortages. In many areas, companies face government regulations to reduce carbon emissions and traffic congestion aggravating door-to-door delivery solutions. Optimizing the business model favors cutting down courier services that’ll help to overcome the disadvantages. That in turn creates a need for a different infrastructure for the last mile that is convenient, flexible, and fast for the company as well as for the consumer.
The main concerns the logistics sector faces during the increase in workload are foremost rising transportation costs and labor shortages. In many areas, companies face government regulations to reduce carbon emissions and traffic congestion aggravating door-to-door delivery solutions.
To balance the logistics company's cost and revenue, automation helps companies to handle bigger parcel volumes with less workload for employees. Collection points are a solution to drop packages securely for the end users to pick up. The pickup option from the parcel locker helps to increase customer experience because of its working hours' flexibility – no need for waiting for a courier or to depend on the store’s working hours. The collection is available 24/7 if the parcel locker is located outdoors. The accessibility of parcel collection is important to the end user – the optimal distance between the customer’s starting point and collection point is the so-called slipper's distance that’s a maximum 400-meter walking radius.
The accessibility of parcel collection is important to the end user – the optimal distance between the customer’s starting point and collection point is the so-called slipper's distance that’s a maximum 400-meter walking radius.
Sweetspots, where lockers can be installed, are in suburbs, near grocery stores, gas stations, malls, public transport hubs, and other strategic locations. Locations, where people pass by regularly and stroll to the pickup point, can be combined with daily errands. Rural areas are a place where installing a locker might be a risk, but on the other hand, a great pay-off – as home delivery prices are high, delivering multiple parcels to one collection point helps to reduce the cost for the company and helps to be closer to the customer at the same time. Automation is not a new word in this industry and has been a possible solution to optimize a business model for nearly two decades. But what has changed during this time are the possibilities of integrations into the business model of automated collection points. As the price range of lockers is equalizing, it is in the hands of the logistics companies, which is the standard of service and product needed.
The easiest, fastest, and most flexible way to spread parcel collection points footprint is the outdoor parcel locker that is also opened outside of working hours, modular and compact to maximize capacity. The solution is also affordable to the company that’s taking the first steps in optimizing deliveries in the last mile. Many logistics companies are using Cleveron 352 to expand the delivery solution network in the last mile. Automation solves many problems that logistics companies are facing and therefore making it an incredibly efficient solution to improve service for end-users. The investment in the automated pickup will pay off saving at least three times the amount invested during the locker's lifetime.
The greatest advantage of developing an automated parcel delivery solution is the simplicity of the system which helps to automatically track consumer habits and be present for the customer. On the other side, the lockers network partner is present for the company with every concern regarding parcel lockers network management. For example, Cleveron has a whole department of After Sales who is working on these questions and problems 24/7. The company takes full responsibility as being a viable partner to the logistics company that has chosen the expansion strategy through the parcel lockers network.
Overall the stable but intensive growth is demanding more flexibility from companies operating in last-mile delivery to keep up with the pace. The disadvantages of exponential growth are rising concerns in companies' HR, finance and in legal departments where they’re facing workforce shortages, cash flow questions and government restrictions in transportation. Using automated solutions contributes to solving these concerns. To continue expanding companies' delivery footprint and to be sustainable in executing expansion strategy, one can be solved by building a strong and dense parcel lockers network system in operating areas. This will help make delivery more efficient, flexible and faster.