The reforms that are happening in the Logistics industry have been the wind beneath the wings of e-commerce as well. As global commerce is emerging on its technology-backed wings, supply chain logistics is following in the footsteps, finding new frontiers in highly productive transport systems. There have been new researches on delivery of products in urban environments called the “last-mile” logistics.The overcrowded cities and the explosion in e-commerce home delivery are raising questions on the feasibility of conventional last-mile logistics strategies.
Innovative, technologically advanced solutions for Last Mile delivery are taking shape to address the issues of fast-growing mega cities and inaccessible suburbs .
What is Last Mile delivery?
The indispensable element in the logistics and supply chain, the Last Mile delivery is the process of conveyance of any package from the warehouse to the customer’s doorstep. The prime objective of the Last mile delivery is to ensure customer satisfaction and deliver the package swiftly and safely to the customer. It is a most required and time consuming job that must be carried out with great fidelity. While the length that needs to be covered can be anywhere from 50 to 100 miles.
To quote the statista report, “In 2018, over 3.87 billion U.S. dollars were invested in last mile delivery startups.” Since the potential of last mile delivery is recognised by the companies, especially in the case of e-commerce delivery, it is subject to grow over time.
Drones and the Last Mile Delivery System
Transport plays a major role in the effectiveness of the Last mile delivery. While most of the journey involves transportation through main roads and highways there are places in the urban cities that are densely populated or even too detached to make delivery easy. Many interior rural areas also need an alternative solution of delivery other than roads. With problems like navigation and routing, the idea of Last Mile Delivery is disrupted and that causes a blotch over the logistical and supply chain front.
Drones or the use of Unmanned Aerial Vehicles are the best solution for Last Mile Delivery. Jeff Benzos, the founder of Amazon, first mentioned the involvement of drone delivery known to be Amazon Prime Air, back in 2013. Since then, many other companies like Google’s ‘Google Wing’ project, DHL parcelcopter, Alibaba, FedEx have taken up drone delivery to fulfil the demands of the customers.
Drones: the future cornerstone of Last Mile delivery system
Now that we have discussed the use of Drone in transportation of parcels and packages for e-commerce, let’s find out its advantages and how it is beneficial to the entire process of supply chain management.
Reduced Delivery Cost- Based on the idea of being cost effective, there are several assessments made to attest the idea. Upon further analysis, it was observed that drone delivery cuts down the delivery cost for the company. The transport cost, tolls and taxes costs etc can be nullified with a drone delivery initiative. The elimination of manual labour cost is also added, making it a pricey option to deliver.
No Transport Rentals- Even to send packages from one place to another, the logistics company needs to rent vehicles, such as trucks. Parcels, big or small are delivered as Last Mile delivery to your doorstep using these vehicles. The vehicles have hefty rentals that are added as overhead costs. Even paying the driver to drive around the city costs the logistics company a lump-sum amount. This can be avoided using drones.
No Congestion Charge- Most of the logistics companies have to pay a decent amount as the cost of congestion to enter the busy premises of the city or town with the goods. This can be called an unnecessary need in the time of drones as they can take over the delivery as a substitute to on-road vehicles. Thus, the logistics company will not have to bear the congestion cost.
Easy Navigation- Drones have in-built GPS that allows them to navigate through dynamic terrains and deliver the package promptly. This is the major focus of the Last Mile delivery process, as it could be difficult for human efforts to locate the exact address and drop the packages in such highly inaccessible geographic locations. Vehicle transportation may also fail to cross natural barriers and difficult landscapes to reach the customer. However, drones can easily do that without a sweat.
No Missed Delivery - Dissatisfied customers are an absolute no in e-commerce business. Missed deliveries are one reason customers have to hassle themselves with the logistics company. Be it delayed or overdue deliveries, there is no scope for such doubts with drone delivery systems.
Mobile Tracking - The GPS in the drone can provide factual information to the dispatch office and the customer about its location. This negates any chances of theft or displacement of packages. The drone delivery is reliable as it is precise in locating the address and also provide a safe and secure delivery without any damage to the product. These are sometimes missed by logistics companies and thus have to be addressed by the e-commerce company.
Environmental Benefits - The fact that the increasing number of vehicles add to environmental pollution isn’t a new-found wisdom. The eco-friendly nature of drones gives them optimal advantage in this scenario. Though some people may argue it as contributing to noise pollution, the advanced drones that are used today, have noise cancellation systems to hurl away this issue.
The possibilities of a drone-based delivery system might seem sceptical at present, but nevertheless, would soon be a futuristic solution to Logistical operations. Other than this, there is still research going on around the delivery of heavy packages - something that the drones aren’t capable enough to do today. But as assured, this query will soon be resolved with ongoing experiments on other prototypes of drones.
The forecast for Last Mile Delivery
As Markets and Markets states in one of its reports, “The drone logistics and transportation market is estimated to be valued at USD 11.20 Billion in 2022 and is projected to reach USD 29.06 Billion by 2027, at a CAGR of 21.01% during the forecast period” It is also expected that drone delivery would expand to other industries after scaling up in the Logistics field.
From healthcare and food to Arms & Ammunition delivery, delivery of goods could be carried out with much efficiency with proper research in the sector concerning drones. But for now, the logistics and transportation industry is keeping it busy with warehousing, infrastructure, shipping, and software.