Supply chains and carriers have business-to-business delivery down to a science, but the rise in trends like e-commerce, crowdsourcing apps and same-day delivery has upended the last-mile delivery segment.
If the last mile is ripe for disruption, supply chains must begin to perfect those fulfillment processes to find new and cost-efficient ways to deliver products to customers.
In 2015, venture capital investments in supply chain and logistics start-ups was more than four times higher than in 2014 ($1,202 million versus $388 million), said Pharand, and venture capital dollars invested in the same space in the first quarter of 2016 alone was $1.75 billion.
Companies like Uber RUSH for parcels, Postmates, Deliveroo and even Amazon Flex provide spot-market deliveries by independent drivers. The companies post delivery jobs on their apps to alert drivers to available gigs. “Picking up and delivering ad hoc isn’t as efficient as delivering something where you have strong route management, with items in your truck and you know where you’re going,” said Pharand. But technology leverages this vehicle utilization, and those with a car (or even a bike) who want to earn extra money can do so.
As more and more small-distance and last-mile delivery services make to the market, the bottlenecks in providing reliable and fast services more and more becomes a human resources issue in regards to available drivers and vehicle service.
Any delivery business concept involving individual drivers will highly depend on the availability of drivers and vehicles at any time and up until now, drivers and their needs are not really taken into high consideration.
The choice of vehicles and vehicle development is treated like a boring hardware task and usually down on the list of delivery services and app providers. Only DHL has recently really taken on the task of actually designing and producing a range of highly adapted and optimised range of cargo delivery vehicles. UPS also is testing electric bike solutions at the moment.
Operating cargo and delivery vehicles is mostly a man-machine problem, starting from intelligent apps, functioning navigation solutions and vehicles optimised to the hard work.
Using cars for last-mile delivery (Uber) will be imposed to raising limitations in an political environment where more and more cities exclude, limit and restrict the use of cars and other motorised in their centres. Also, less and less young urban people actually obtain drivers licences or own cars, reducing the available amount of drivers available willing or able to do the job.
E-Bikes have a wide range range of advantages over any other motorised vehicles. They are very low cost, easy to maintain and have literally no hidden costs like fuels, lubricants, taxes or insurances. There are 5 very important aspects that will make the utitlyity the choice of the future:
Modern cities today invest millions in creating better and faster bicycle lane infrastructures. Just Berlin alone is investing over 20 Mil. Euros in 2917 to build over 100 km of fast bike lanes. In 10 years, billions will have been invested in new and modern bicycle infrastructure, while car traffic is pushed back.
E-Bikes make maximum use of these investments and will soon be the fastest way to get around in any city, giving them a clear edge towards any other road bound vehicle like scooters or delivery mopeds.
Also, new decontrol delivery hubs will be created, providing a great starting pint for any driver who actually wants to earn money.
As more and more competing delivery services run for the market today, cost pressure will raise and availability of drivers will become a huge bottleneck.
E-Bikes do not require drivers licences or have minimum age requirements (mostly required in insurance policies). So riding for a delivery service via e-bike is something any student can do part time.
Also, handling and managing HR is a lot less complex with licence / insurance free vehicles.
Concepts in where drivers get their own e-bike by the delivery company for private use to pay it off with delivery rides are in development, making it very attractive for young drivers.
Direct operating are about 3-10 Cent per km, while a car is close to 30-40 Cent per kilometre.
An e-bike is faster and a lot more versatile, reducing delivery times and allowing for more flexible routing, as they can mix bicycle lanes, roads and parks into very effective route planning.
In addition to that, unlike scooters or cars e-bikes are allowed to be parked even on sideways, allowing drivers to drive directly to the point of delivery without the need to look for parking or park in second row. There are no downtimes for refuelling either.
In conclusion, last mile delivery e-bikes will play a huge role in urban cargo and parcel operations and the task for the logistic companies will be to find the perfect vehicle system for the job.
The perfect electric delivery or cargo e-bike will need to be versatile, flexible and fun to ride. It should designed in a way that allows multiple roles and it should have a high resale value to keep the costs low.
Weather protection, safety features and riders comfort are increasingly important, as drivers will choose their partner companies not only by income, but also by the vehicles they offer.
Today, it seems that strong utility bikes in combination with flexible trailers and box systems are the best solution, as they can cover a really wide range of tasks while still being useful as a private vehicle for the drivers:
Smart delivery companies will now start to revert some attention to vehicle design and invest in the design and production of specialised vehicles that are not only great for the job, but also great to drive and great to look at.