By Abhijit Sengupta, Senior Director and Head of Business, Southeast Asia and India, HERE Technologies
There is no doubt that the pandemic has hugely accelerated Southeast Asia consumers’ desire for e-commerce options. According to a report from Facebook and Bain & Company[1], approximately 70 million more people shopped online in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam since the pandemic started.
This trend is here to stay and the rapid growth of e-commerce sales in Southeast Asia[2] poses challenges for retailers in providing efficient and cost-effective transport of goods to the customer’s doorstep.
Last-mile delivery – the final stop in the delivery chain before parcels arrive at customers’ doorsteps – is one of the toughest challenges for logistics. Businesses of all sizes are exploring the newest technologies and experimenting with supply chain models to increase parcel volume, expedite deliveries that will ultimately meet customers’ expectations.
Parcels under pressure
Before COVID-19 disrupted international logistics strategies, last-mile delivery was considered a perk rather than a necessity. Now, doorstep delivery is the only way for brands to compete and satisfy demand. Consumers not only want to order things to their door, but they also want next-day delivery, specific delivery times, and being able to track the driver’s location.
According to the same report1, 32 per cent of Southeast Asia consumers switched between online commerce websites to secure faster delivery time. This shows that customers will not return to a company that doesn’t deliver on time, misses the delivery, or doesn’t offer on-demand, weekend or next-day delivery options.
Consumers also expect highly accurate estimated times of arrivals (ETAs) and real-time tracking of their parcels. They do not want surprises; they want to feel control over the e-commerce experience.
To top off the list of consumer demands, consumers are also now expecting eco-friendly delivery. Half of all global consumers surveyed by PwC[3] described themselves as increasingly eco-friendly, with Southeast Asia leading the way. They now consciously consider factors related to sustainability when making purchasing decisions.
As a result, companies now have a bigger responsibility to meet customer expectations – from the retailer to the final delivery person. To do so, technology is the answer for any service provider wanting to survive – and thrive – in the new world of eCommerce.
Making the last mile the best mile
The last mile is the most time-consuming, complex, and costly part of the shipping process. In fact, it can cost as much as 53% of the total delivery fee of a typical parcel[4].
Not only are there huge logistical challenges for a company in sending thousands of different packages to different addresses using dozens of vehicles and drivers each day, but even the most well-planned route can be disrupted by unexpected traffic jams, accidents, road closures and local events. This is where location technology can provide end-to-end visibility from the first mile to the last.
Companies that are already adopting location technology have their parcels accurately tracked at each handover stage. This presents a huge opportunity for cost optimisation and efficiency in last-mile delivery.
For example, in a webinar about last-mile delivery, organised by EuroCham Singapore[5], Singapore Post (SingPost) shared that they are moving towards a mobile-centric customer experience. They are looking at how they can optimise deliveries and postings by either digitising the addressing and stamp process or sending customers notifications of when to expect mail.
Drones and autonomous vehicles are also being tested to support last-mile delivery because they cover longer distances in shorter delivery timeframes and have the potential to reduce the mismatch between demand and supply.
In the same webinar, Foodpanda, a food delivery company based in Singapore, is partnering with the National University of Singapore to create autonomous robots that function as riders, picking up orders from merchants and delivering them to students and staff across the campus5. The first robot in the market has already passed the Land Transport Authority’s safety assessment for supervised use and there are plans for operational testing in selected condominiums in Singapore.
No one-size-fits-all logistics solution
The ongoing supply chain disruptions are forcing companies to channel their investments into automated solutions in warehouses or distribution centres to increase competitiveness and reduce operating costs; Internet of Things (IoT) to provide end-to-end supply chain visibility, creating more efficient and agile supply chains; and sustainability-driven operations to ensure efficiency and lower fuel consumption.
However, it is impossible to create a unified last-mile solution for all as every end consumer is different. Instead, it is important for solutions to integrate and interoperate across platforms, so vendors and suppliers can leverage the ‘platform of platforms’ while allowing the creativity to generate new solutions.
Last-mile delivery continues to be important, and with location-based tools, companies can expand their visibility and control for a diverse range of logistic operations – from dock to door; from restaurant and grocery delivery to post to retail.
It’s time for companies to digitise and harness the power of location technology. If the logistics industry has learned anything from the past two years, it’s to be ready for anything. While that in itself may be impossible, incorporating a location-based supply chain strategy is not.
[1] Southeast Asia, The Home For Digital Transformation, Meta for Business
[2] Southeast Asia sees the fastest digital sales growth in the world, eMarketer
[3] A time for hope: Consumers’ outlook brightens despite headwinds, PwC December 2021 Global Consumer Insights Pulse Survey
[4] The challenges of last mile delivery logistics and the tech solutions cutting costs in the final mile, Business Insider