The trend lines are clear: global parcel shipping is only going to keep growing each year, thanks to a combination of factors – from warehouse automation to the popularity of ecommerce shopping with online retailers and marketplaces like Amazon. Continuing at an expected annual growth rate of 15-25%, we are likely to see approximately 100 billion parcels ship around the world in 2020.
Yet, while the industry continues to grow along these predictable lines, many of the same challenges and pain points remain as thorny now as they were five years ago. One of the most prominent of these is the last mile of delivery, the final – and most decisive – stretch of any parcel’s journey. It’s an issue that has been rife with efficiency and cost challenges for years. But it’s not without a solution.
The last mile conundrum
The final leg of a parcel’s journey typically accounts for 50% or more of the total delivery cost. That’s an incredibly lopsided balance in how the costs and labor of delivery – from packing the parcel, to processing, to shipping, to receipt – are being distributed across a parcel’s lifecycle. And it reflects some serious inefficiencies built into that process right from the start. Retailers aim to deliver parcels to customers in as seamless a manner as possible, but with so many orders coming in at any given time, delivery centers often focus on just trying to get a processed order into its box and out the door ASAP. That instinct makes sense, but it’s also what has contributed to so many costly and inefficient last-mile deliveries.
Up until a couple years ago, companies like Amazon would ship out orders in predominantly large boxes, regardless of the size of the item being shipped. That saves time on the processing and packing end of the equation, but it also means delivery trucks are being loaded with unnecessarily large boxes. Too many big parcels mean less space overall on the truck, which in turn means needing more trucks, more fuel, more time – and more money being spent on delivery.
Over the last two years, those same companies have shifted in a more environmentally friendly direction, packing items into more appropriately sized boxes, creating more space on delivery trucks for more items and theoretically reducing the need for more trucks on the road. But with global parcel shipping volume still increasing by billions of packages every year, just making space in the back of the truck isn’t enough to solve the problem. An ever-higher volume of parcels still means an overall more expansive and expensive delivery journey – particularly in that last mile.
We’ve recently seen companies try to rectify this issue by passing the buck for smaller parcels onto national or regional postal systems. For instance, rather than UPS delivering large, mid-sized and small boxes to an address from start to finish, it may pass off the smaller boxes in that order to USPS and have them carry it across the last mile as part of their usual mail delivery. That might reduce some delivery costs and legwork on UPS’ end. But from a big-picture view, it’s just spreading the problem around. You still have the same three parcels being shipped to the same destination, except now it’s taking two or more delivery companies to see it through, making the last mile even more expensive and more inefficient.
Leveraging data for delivery consolidation
To date, solutions for dealing with the last mile have concentrated on the last mile itself. But the real solution lies not in looking at the delivery, but at the heart of where it starts: the delivery center.
If we really want to get a handle on the last mile conundrum, delivery centers need to leverage parcel data for the sake of consolidating parcel processing and shipping. No one person should be getting separate items from USPS, UPS, FedEx, DHL and whomever else all at once on a given day; yet, with the way the system is currently set up, that’s an entirely plausible scenario. It’s also a waste of money, fuel, trucks and time – not to mention the knock-on effects for everything from air pollution to traffic congestion.
Delivery center data should not begin and end with just tracking and tracing packages. If delivery centers had hardware and software tools capable of consolidating all facets of mailpiece data – including delivery addresses, barcodes, parcel dimensions and weight – into a single easy-to-reference database, it would be far easier to, for example, intuitively group packages together for delivery based on the final destination. That way, instead of sending out half a dozen packages on a half a dozen different delivery trucks, they all go on the same truck, headed for the same place. That’s a more efficient, time-saving and cost-effective route to beating the last mile conundrums that have plagued shipping companies for years.
With TrueSort®, VariSort™ and SortEngine™ 360, BlueCrest has invested years of shipping industry experience and expertise into creating a suite of hardware and software sorting solutions perfectly suited to finally cracking the last mile of delivery.
Our sorting tools make it possible for delivery centers to better consolidate mailpiece data and leverage that information into parcel processing and sorting. Sort Engine 360, in particular, is ideal for not just collecting this data, but enabling a seamless integration with postal service providers’ existing IT infrastructure for flawless data exchange and control. All of this allows for more streamlined, efficient last mile routes, cutting down on labor, fuel, time and costs – all without compromising the recipient’s experience in getting their package in a timely and transparent manner.