Open Source Last Mile Logistics
Direct end-customer commerce involves a direct delivery to the end-customer and this puts a heavy pressure on logistics.
Direct end-customer commerce can be described as the phenomenon whereby products are directly sold to the end-customer. It is driven by 2 separate trends: brand (manufacturers) selling directly to the end-customer and on-line retail. Both trends have in common that it involves a direct delivery to the end-customer and this puts a heavy pressure on logistics to transform into a customer centric enabler of direct end-customer commerce.
Logistics is the domain of many logistics and transportation companies that all try to win a part of the growing commerce pie. Will that battle result in customer centric logistics? Likely not. Is there an out-of-the-box alternative that could disrupt things? The answer might lie in open source last mile logistics.
Open source last mile delivery options
Does a customer really care what transportation company delivers the goods he purchased online? Or does he only want to select from 4 delivery options: time un-definite (24/7) pickup at an unmanned parcel locker, time definite (9-5) collection at a manned pickup point, time un-definite (24/7) delivery in a residential parcel box or time definite personal delivery when he is at home.
Let’s forget all transportation companies for a while and just consider these delivery options to be open source. A customer can choose from these 4 options in any checkout at any online store. From a customer perspective that will make the buying experience much more friendly and transparent.
Open source transportation API
We cannot forget transportation companies as there needs to be an executing party behind these delivery options. Actually there are many transportation companies involved. Some offer all delivery options and some offer only one. Some companies operate global and others only local. And all in between.
Let’s assume there is an open source API that enables all brands and retaillers to simply connect to all transportation companies. One simple integration that provides access to all transportation services that want to offer services in the commerce space. One integration to link the 4 delivery options to execution.
Open source network and sorting capacity
In some cases a delivery can be excuted from the store directly to the customer. This is the space of specialized “Uber-like” services that deliver products in a predefined region (the equivalent of the pizza boy), with a dedicated service (e.g. within 2 hours) or a consolidated delivery from all shops in a certain shopping street or commercial center.
In most cases however global and mass-volume delivery requires network and sorting capacity to sort the shipments from the store to many last mile delivery options in a wide geographical area. The end-to-end logistics chain involves activities like collection, sorting, line-haul, sorting and last mile delivery.
Ideally the perfect last mile delivery option should only focus on the last mile itself. It should not be limited by network and sorting capacity. What if it could obtain open source network and sorting capacity from companies (e.g. integrators) that do have these capacities anyway. That would allow new specialised last mile services tailored to the expectations of the customer. Not just services that can cover the end-to-end delivery chain and are not necessarily the most suitable for the last mile.
Open source parcel lockers, pickup stations and residential parcel boxes
There are many initiatives in this space. The problem is that many of these are exclusively operated by a transportation company. That means these last mile delivery options can only be used if the store works with the company who operates them. From an end-customer perspective it is quite frustrating if the parcel locker around the corner can not be used for all purchases at all stores. Having multiple parcel boxes mounted at their house is a no go. Last mile delivery would be much better off if all solutions are open source and can be used for all delivery options from any store. 100% customer success rate should be the common goal. It shouldn’t matter who delivers in the locker or box. What matters is that the customer can always use these options when buying at any store.
Open source personal delivery
It is commonly accepted that multiple trucks delivering at a residential address is not sustainable. We also know that a personalized delivery experience is an important part of the overall shopping experience. From a customer perspective that experience should be the same for every personal delivery. If the customer would expect a different (read cheaper) experience when buying at a certain shop he would have selected another delivery option like pickup at an unmanned parcel locker. What if the personalized delivery service would be open source and would be fully tailored to the requirements of the customer and available at any store. The late driving supermarket (like the SRV man in The Netherlands) would be a perfect open source solution for consolidated personal delivery.
A thought or reality?
Is open source last mile logistics just a thought or could it be a reality? The final question would be who determines what last mile delivery options are available at a store? The store or the customer? Or should every store simply support all 4 last mile delivery options?
Having open source last mile logistics would simplify things. What do you think?