Richard Baker, CEO of GeoSpock
While the shift to online has gained momentum in the last few years, the global pandemic has greatly accelerated the e-commerce boom, especially in Asia. National movement controls, which includes the closure of some brick-and-mortar shops, has led to the popularity of same-day deliveries of daily necessities. For instance, Singapore’s leading online supermarket site, RedMart, has witnessed an increase in orders of more than 300 per cent above its weekly average when the government raised its Disease Outbreak Response System Condition (DORSCON) level to Orange in February 2020.
This increase in online grocery orders is likely to last beyond the health crisis. While this is a clear opportunity for online grocers, it can quickly become a challenge for them if incoming orders are not taken care of. Due to how rapidly circumstances are evolving, we are already seeing shortage and delays in supplies, as well as the lack of delivery staff to offset this increasing demand.
Rethinking last-mile logistics
One area to target in the e-commerce supply chain is last-mile deliveries. Last-mile delivery refers to the final step in the overall delivery process. For instance, at a grocery store, that last-mile would be from shelf to customer, but in an online marketplace, the last-mile would be the journey taken by drivers to deliver items from the storage or warehouse to the customer’s doorstep.
In order for last-mile deliveries to be successful, businesses need to ensure that they meet customers’ demands and ace the logistics on backend operations. Common delivery failures include late deliveries, lost orders, and undelivered orders. Every time a delivery attempt fails, it adds extra cost to the total logistic operation, impacting transportation, re-delivery time, and additional time in storage. These have dire consequences that would impact on customer experience and loyalty in the long run.
According to the latest IDC Manufacturing Insights Asia Pacific report, the current pandemic has led to 58 per cent of organisations indicating that their immediate focus is on increasing supply chain visibility to help create operational resilience. It was also reported that in addition to intent, manufactures need to invest in IT infrastructure, such as location intelligence, that allows them to manage, track, and trace their supply chain elements better – all to avoid the domino effect of failed last-mile deliveries.
Location intelligence enters the equation
To maximise returns and at the same time manage the ever-increasing number of daily orders received, sellers need to fully arm themselves with location intelligence. It is an almost impossible task to manage the dispatch of drivers that are located in different parts of the city at different points in time while optimising their routes to check off as many deliveries as possible in a day.
Here’s a classic case: two deliveries in the western and eastern area of a city. The distance between the two drop-off points may lead to delays and thereby limit the value that sellers look to create for the customers. Is it, then, more effective for a particular driver to be allocated a particular area in the city for a shorter journey? Could certain routes be swapped between drivers to reduce their driving times?
Combining real-time geospatial data – including weather, traffic, and even air quality – could help ensure that drivers do not face any hurdles along the way, making their journey time- and resource-efficient. Of course, this would require a database optimised for geospatial querying, capable of fusing real-world data to unlock its true value, while reducing complexity and cost.
This kind of joined-up ‘intelligent’ route planning could optimise road haulage operations like never before. Insurance costs could be reduced, for example, if the risk of incidents was lower through drivers avoiding hazardous weather conditions or accident blackspots. Overtime payments to drivers could be kept to a minimum, and freight could be moved around the city with fewer delays.
Investing in smarter infrastructure
All in all, logistics will need to be faster, more resilient, and less subject to manpower-related challenges from point of sale to last-mile delivery. With more delivery vehicles on the road today as a result of the pandemic, there is an increasing need to address improvements in emissions and global warming. Governments must invest in future-proof city infrastructures for the long run, and this may include the adoption of electric vehicles (EVs), night deliveries, deliveries at marginal times, or special parking areas for delivery vehicles.
In this case, geospatial data will help by highlighting unique usage patterns in specific areas and shedding light on the best route to take when it comes to EV infrastructure investment. Once governments have a clear picture of usage and behaviour in a particular location, this can remove a lot of the guesswork from city infrastructure decisions.
This year, Singapore announced its nationwide parcel locker network that will radically transform last-mile delivery and create a sustainable ecosystem. This can benefit the consumer, the seller, and the drivers – the ultimate win-win-win. Consumers can look forward to greater convenience and wider options in their preferred parcel pick-up locations, while the sector as a whole will be able to manage the sudden surge in e-commerce volumes in the new environment.