DHL and Euromonitor have identified four main trends that are shaping urban last mile transportation. Increasing urbanization is making the last mile of delivery more complex and critical for the success of e-commerce companies. With over 600 million more people forecast to live in urban environments by 2030 and new technologies creating opportunities for both service enhancement and disruption, online retailers and their logistics partners are being challenged to embrace bold new approaches in order to survive and compete. In the whitepaper, Shortening the Last Mile: Winning Logistics Strategies in the Race to the Urban Consumer, DHL and Euromonitor have identified four main trends that are shaping urban last mile transportation – localized delivery, flexible delivery networks, seasonal logistics and evolving technologies – and ways in which companies can adapt their supply chains to the changing market environment and achieve competitive advantage.
The whitepaper found that the major urban trends all create various challenges in terms of cost, service impact and organizational strain. For example, the growth of seasonal logistics as a result of increasingly popular holidays and promotional days such as Asia’s Singles’ Day or national Cyber Days, places significant pressure on logistics companies to build up additional capacity and hire resources to cope with short-term volume surges, which can, in turn, be difficult to predict. Urban customers’ demands for speed and convenience are forcing retailers to overhaul their warehousing networks, replacing centralized networks with local fulfilment and distribution infrastructure, which can require a more accurate balancing of inventory. Evolving technologies are creating opportunities for new disruptive challengers to enter the market, while also requiring incumbents to invest prudently and incorporate new skills into their workforce.
“The last mile is increasingly becoming the key battleground in the e-commerce supply chain. Companies will have to develop targeted strategies in this area to compete effectively,” said Katja Busch, Chief Commercial Officer, DHL. “It’s not just about transportation, but about companies’ overall approach to managing inventory – getting the right items to the right place at the right time.”