Rethinking e-commerce with last-mile revolution

"All endeavor calls for the ability to tramp the last mile, shape the last plan, endure the last-hour toil. The fight to the finish spirit is the one characteristic we must possess if we are to face the future as finishers," said Henry David Thoreau, an American naturalist in the 18th century. The statement was made during a non-ecommerce era yet is so relevant today as last-mile effectiveness and efficiencies continue to gather momentum. The last leg of the journey of goods from distribution hub to the delivery destination is one of the most crucial aspects of ecommerce. The events of the past three years have driven massive ecommerce growth and triggered touch-free and same-day/ hour deliveries, leading to heightened focus on last-mile logistics. 

Allied Market Research states that the global last-mile delivery market was valued at $131.5 billion in 2021 and will grow to $288.9 billion by 2031. India’s last-mile delivery is also following an exponential growth trajectory and will reach $6-7 billion by 2024. Interestingly, more than 50% of the cost of delivery is due to the last-mile shipping cost.  Last-mile optimization and efficiency will directly yield benefits to customers through reduced delivery cost and improved satisfaction. As a result, e-tailers and third-party logistics (3PL) are investing millions on mobility and in perfecting the efficiency of the last-mile delivery through disruptive technologies. 

The government’s decision on National Logistics Policy will accelerate growth and increase India’s participation in global trade. A technology-powered and enabled logistics ecosystem will play a vital role in ensuring the execution and success of this policy. 

AI/ ML fuel last-mile logistics

Historically, statistics have been used to solve logistical problems – though it helps to some extent, it is not real-time. Artificial intelligence/ machine learning (AI/ ML) algorithms have the capability to look at historical insights and get trained on the best routes and package sizes, creating better possibilities and solutions to address the last-mile challenges when faced with fluctuating demands. Indian company, iThink Logistics has gone a step ahead and linked its online portal with marketplaces, giving them real-time tracking updates. Their patented non-delivery report (NDR) is AI-driven and uses interactive voice response (IVR), WhatsApp, SMS, and so on. This helps the company avoid non-delivery and reduce product returns through automation. 

Enabling last-mile delivery using dark stores

Ever wondered how quick-commerce startups such as Zepto promise delivery of groceries in 10 minutes? The answer is a dark store, which is a storage facility located close to the destination, making the delivery faster and easier. Swiggy’s Instamart and Zomato’s Blinkit have also initiated similar concepts to make the last-mile delivery efficient. Mobile-based retail management solutions and retail applications are emerging to manage these dark stores. 

The role of autonomous vehicles

Predictions state that 80% of the global last-mile deliveries will be automated by 2025. Startups and large companies are investing heavily in developing mobile robotic units that can travel a few last kilometres to deliver small goods and packages. These vehicles avoid traffic and use sidewalks. They are smaller in size and electric, requiring lesser energy and reducing carbon emission. 
Ecommerce giant, Amazon’s delivery robot Scout can roll on the pavement and deliver packages at customers’ doorstep. It uses sensors and ML instead of Global Positioning System, commonly known as GPS, to navigate. While this is still at an early stage in India, companies such as Minus Zero (a Bengaluru-based startup), are developing AI-enabled solutions for autonomous vehicles and focusing on logistics-related solutions. 

The drone disruption

Drone technology is being explored for last-mile deliveries and predicted to be a disruptor as it overcomes traffic bottlenecks, reduces carbon emissions and helps e-tailers create customer delight by on-time and instant deliveries. This technology will prove to be essential for reliable and resilient delivery chains. The government estimates India's drone business generating a total revenue of ₹120-150 billion ($1.63-2.04 billion) by 2026. And it targets the country becoming a drone hub by 2030. Swiggy has been looking at drone service providers for delivery of goods. Gurugram-based startup Zypp Electric has partnered with TSAW Drones, India’s leading drone R&D and manufacturing setup, to add drone delivery for last-mile delivery services. 

An increasing number of e-tailers & 3PLs have been reinventing their strategies to make last-mile deliveries more effective and efficient. With such efforts backed by technological advances, a contactless marketplace, offering second-to-minute deliveries and reduced delivery cost mimicking an in-store shopping experience in an online world, is bound to be the future.