The last mile is crucial to e-commerce – and retailers are coming to understand the importance of offering various delivery options to online shoppers. Bricks-and-mortar retailers too are bringing a new focus to the last mile, and leveraging their physical network for alternative delivery.
Cainiao expands lockers and consolidates orders
Cainiao Network, Alibaba’s logistics arm, plans to expand its locker network throughout Spain and France, with a target of 2,000 lockers by March 2022. Currently Cainiao has 250 lockers across Spain and France. These lockers are in addition to the more than 2,700 collection points managed by its logistics partner Celeritas.
This is more evidence of Alibaba getting serious about the last mile in Europe. It has already embarked on an expansion program in Russia, seeking to install parcel lockers and PUDOs in partnership with local small businesses. It has also sought to expand its locker network in Poland.
Cainiao also offers order consolidation, combining multiple packages from various AliExpress merchants for a single consumer. This further reduces last-mile costs, especially when in concert with parcel lockers.
Cainiao is right to seek to develop a locker presence, the question is whether it will have the ability to source enough locations… and on time. InPost, Amazon and several others are already on the case. Perhaps an open network approach would be the answer?
UPS, Roadie, and same-day delivery
UPS is getting into same-day delivery. It’s done a deal to buy Roadie, a platform that uses gig workers for delivery. Earlier this year, UPS CEO Carol Tomé said the company was exploring same-day delivery options. UPS and FedEx are big on overnight services but generally don’t deliver packages same-day.
With this acquisition, UPS will use Roadie to evaluate whether or not it will enter same-day, on-demand delivery in a big way. Now, instead of being on the outside looking in, UPS will be able to look at the data and decide if they should get into same-day in a big way.
We also have to consider the trend for on-demand, forward stocking and micro-fulfilment centers. If more online retailers opt for delivery partnerships with same-day players, it could ultimately mean less volume and business for the big carriers like FedEx and UPS – and even some of the regional carriers.
Roadie will operate separately to UPS, with Roadie shipments not being handled in the UPS network and vice-versa. This makes sense both operationally and to keep the Teamsters union happy.
Watch for future skirmishes between UPS and the Teamsters over wages and employment conditions. Similar battles are being fought in other parts of the world, but that notwithstanding, UPS and its peers will be under continuing pressure to reduce costs in the last mile.
Lockers and Deichmann’s omnichannel strategy
Shoe retailer Deichmann is installing parcel lockers for click-and-collect orders.
Deichmann saw a fall in retail sales of about 20% in 2020, and the growth in online sales has not compensated for the loss of revenue in its bricks-and-mortar shops. The new parcel lockers are part of its new online strategy.
The first “pick up station” is at the Mülheim-Dümpten location, and is accessible 24 hours a day. Deichmann says more branches will follow soon. The retailer is currently active in 31 countries with about 4,200 local shops.
Ian Kerr is the founder and host of the Postal Hub Podcast, the weekly podcast for the postal and delivery sectors.
Marek Różycki is managing partner at Last Mile Experts, specializing in CEP and e-commerce last-mile advisory.
Follow us on LinkedIn