The explosion of e-commerce has caused shippers and carriers to increase their focus on last-mile delivery. Marc Levin, chief commercial officer with Cargomatic, explains how they’re coping.
SCB: How do you see the increased focus on last-mile delivery changing the way that shippers and carriers operate?
Levin: With the proliferation of the e-commerce industry today, more and more people are putting their attention into the final mile. Most importantly, one must recognize that it’s an area of concern because it’s currently the largest cost in the final leg.
SCB: What are the most daunting challenges that shippers face today, when it comes to last-mile delivery?
Levin: The biggest challenge we experience today is that, with the proliferation of e-commerce, more customers want their products delivered yesterday. The concerns we run into are caused by two-income families, congestion, heavier densities, and the urbanization that’s taking place in society today. They make getting trucks into delivery areas, even parking prior to delivery, problematic. Real-time world events, congestion, accidents — all play a part in the final mile, and all are adding costs.
SCB: How can technology help?
Levin: Customers are looking to technology, taking advantage of what was once an EDI [electronic data interchange] batch environment, and has evolved through cloud, SaaS [software as a service] and now APIs [application programming interfaces]. Everything is in real time, allowing customers the option of meeting up with a driver at their homes.
SCB: The challenge for the carrier is how to deliver on the promise of timely delivery, with pinpoint tracking. Is there a gap between expectation and reality?
Levin: Yes. One is the cost of the service. Customers don’t like to pay for lift gate service, residential service, weekend delivery, and all of the other things that were never a concern under the traditional Monday-through-Friday workplace of a B2B environment.
SCB: How do you see the gig economy impacting the supply chain?
Levin: For the transportation industry on the operator side, the gig economy has been wonderful. We’re able to add capacity literally at a moment’s notice today. Interestingly enough, in supply chain, with recruiting at an all-time record high for the third year in a row, the gig economy is going to pay a bigger part in what I’ll call the freelance operator, especially on the technology and operations side. Supply-chain managers have yet to truly embrace the gig economy, but they’re going to have to, based on current expectations.
SCB: Are there different expectations of quality on that end that don’t need to be addressed on the passenger-transportation side?
Levin: Internally, the issues of quality are much greater for a truck driver following the law. How do you quickly take a freelance or a short-term contractor and have them properly understand current SOPs [standard operating procedures], short- and long-term vision, and other strategies within the organization? It requires creativity. The molding of an individual on a contract basis does take some time.
SCB: Can you draw from the pool of drivers on the passenger side, or do you need a completely different group of service providers when it comes to freight and e-commerce deliveries?
Levin: On the trucking side, most of the individuals we work with handle the delivery of freight. It’s not as if they were just doing food or floral deliveries. They understand the unique nuances.
SCB: What are the comparative challenges of B2B versus B2C in this area? Are there issues there?
Levin: No, but you do have to mingle both B2B and B2C on the same driver routes, with the proliferation of e-commerce today.