Europe and the USA have different ways of looking at last mile solutions. Testing is important as failure drives improved sustainable solutions. We spoke to Dean Maciuba from Crossroads Parcel Consulting about the two markets, what would really work for the last mile, regardless of location and if companies are really investing in green because they care. Full video interview is below.
What are the last mile models that consumers are looking for and that drive true sustainability?
I think what we should first do is draw a bit of a differentiation between Europe and the USA, because Pick-up or Out-of-home delivery is much larger and more well-accepted in Europe than it is in the US. But in the US, we do have solutions that are in place and working. I think most importantly is Buy online and Pick-up in store. That’s been very popular, especially among our larger big box stores like Target and Walmart.
In the US, we also have a large network of staffed access point locations too. One such group of stores is the UPS store, and there are over 5000 of them.
You see tremendous acceptance at those stores for both holding shipments for pick-up and acting to receive inbound shipment for a customer to Pick-up. Staffed access points are important to many consumers. This means that it is ease-of-use and not necessarily technology that is driving the consumer to a location. Staffed access points also drive cost savings for the carriers via stop consolidation, with sustainability being a byproduct of a cost savings initiative.
Parcel lockers have not been generally accepted in the US in the same way as in Europe. However, Amazon Parcel Lockers are a great opportunity for customers to defer local delivery and consolidate stops at a single parcel locker location, via Amazon’s single day, weekly delivery…another indirect cost savings initiative that drives sustainability.
Why do companies invest in sustainable initiatives? And does it actually matter why they do it if the end result is a greener industry?
Many of the carriers are publicly traded and have an obligation to their shareholders to drive the best profitability possible. While more costly up-front, EV’s drive long-term savings as maintenance costs are lower than that of vehicles that are based on internal combustion powertrains. This is the perfect example of a greener solution also reducing operational cost.
Do you think consumers look at how an order is delivered and how sustainable it is?
Today, here in the US, there are obviously consumers that care about that, but not basing their purchases from the merchant that embraces the most sustainable delivery solution. But as we go down the road of global warming, I think that will happen. Europe is ahead of the US with consumers demonstrating more awareness of merchants that embrace green delivery solutions and embrace access point/parcel locker delivery in a much bigger way than we do here in the US.
Additionally, I think that European consumers might see an EV and not even know it is electric. But when they start seeing things like cargo bike solutions, they’re going to say that it is a great idea and connect it to a greener delivery solution. We are slowly going in this direction here in the US, but have a long way to go towards embracing this greener delivery solution here in most dense urban markets.
How about robotic solutions for last mile delivery? Many have been tried out but without significant success so far.
Today, from a technology standpoint, it is still not reasonable to think that we can have a robotic home delivery that can do everything required to deliver to the front door. In the past few weeks, both Amazon and FedEx have pulled out of their R&D /testing programs for those front-door, fully automated home delivery solutions. However, we must continue to test and sometimes fail, to advance the best possible tech-based solutions to support the most efficient and sustainable home delivery solutions.
One solution we need to continue to develop is drone delivery. If we can get consumers, carriers, and merchants to embrace drone delivery under certain circumstances, that’s probably going to be helpful to the environment.
So what is the solution to the problem then?
In the US, consumers have not embraced out-of-home delivery as well as anticipated. The perceived, e-commerce value proposition includes home delivery and it’s got to be free. Out-of-home delivery could gain more traction if the merchants offer discounted out-of-home delivery solutions.
Do you think companies would be happy to invest in innovation and projects they can’t really see the end result of?
If you are a startup, there is still a lot of venture capital out there, and these companies don’t have a board of directors/shareholders to satisfy with regards to margin profitability. It works better for the smaller companies, who are developing a new technology to be funded through the venture capital process versus having these large companies like UPS or FedEx, attempt this because they have so many things going on due to their immense size. The giant carriers can’t be singularly focused on one project like a small startup or a technology development company can be. I think that type of development is best handled by smaller companies whose sole focus is making that technology work.
What is the role of large organisations in the whole sustainability process?
Amazon has ordered more electric vehicles than anybody for last mile delivery and embraced design certifications for buildings that move them towards NetZero. Forward-thinking companies like Amazon will lead the way towards sustainability solutions.
What’s interesting about Amazon is they’re still a relatively new company, so they don’t have a legacy thought process in place, which can stifle new ideas and sustainable green solutions. The best carriers are messaging about all their sustainability initiatives, to include what they are doing with green last mile solutions.
Would we see competitors in the logistics and supply chain industry work together to fix common problems?
An example of that would be a carrier agnostic Parcel Locker, where numerous carriers could use a single locker instead of every carrier having their own bank of lockers, which is a little bit crazy. However, the largest carriers will probably resist this type of collective initiative based on parcel security concerns and the potential exposure of a competitor seeing who their customers are.
But I do not think we will ever see a third party in a metro area taking over all shipments. It is being tested right now in some European communities, but it will be difficult for a such a solution to gain traction here in the US.
You can watch the full interview with Dean Maciuba from Crossroad Parcel Consulting below.