Amazon has pushed the market to look at alternatives to compete with its Prime delivery program. Once, 3-7 days was the expectation for retail deliveries. Now consumers expect all of their purchases in two days or less. UPS and Fed-Ex have struggled to meet these demands, so retailers and their logistics partners have to innovate to keep up.
Many companies are exploring crowdsourced delivery as an alternative. At its most basic, crowdsourced delivery uses non-professional couriers to deliver the package. In some markets, the driver who brings you your takeout delivery may also be dropping off your purchases for the day.
Companies exploring this idea are drawn to the benefits of a tech-heavy asset lite model. The investment is in the technology, not in warehouses or fleets of trucks. This model is being embraced because the technology investment is minimal compared to the cost of acquiring the warehouses and trucks necessary to fulfill in two days or less. This was put into perspective when Target purchased the start-up Deliv for their batching and order routing technology.
Another primary benefit is that the technology can allow for a delivery schedule when the customer is home to receive the goods. This alleviates some theft issues and allows customers to track their delivery in-process.
This evolving sector has even captured Amazon's attention. They announced the rollout of Amazon Flex in 3 U.S. markets. If the test is successful, how will this change Amazon's thinking on the continued growth of their delivery network?
3PL managers will need to be aware of these trends and have the ability to pivot to meet their customer's needs. There are a lot of unanswered questions yet to be solved.
- Does this change my warehouse operating hours?
- Will I need to deliver to a depot, or will these crowdsourced drivers appear at my warehouse?
- Can my operation pick and ship quickly enough?
- Can my software integrate with these retail and e-commerce partners?
New technologies are still being developed that will continue to push final mile deliveries. How will innovations in artificial intelligence, drones, and driverless vehicles continue to drive change in the final-mile space? No one has the answers today, but Pandora's box has been opened, and now evolution and adaptation are critical components of any 3PL operation.