First steps to a better last mile for e-commerce

Image_first_steps_last_mileThe annual barbeque was only days away when Miriam looked out of the kitchen window of the two-story Duluth duplex she and her husband Mark lived in and realized that their lawn furniture had been ruined by last year’s unusually severe Minnesota winter. Miriam flipped open her laptop and rushed to avert a seating crisis.

In minutes, she had settled on a lovely “Cabrillo Sand Dune 7-Piece Patio Dining Set” that she found on the e-commerce website of a major American retailer. It wasn’t until she had added the set to her cart that she noticed that, even for a hefty fee, the earliest delivery date was eight days away, and after the event. Miriam closed out her browser, an online retailer forwent hundreds of dollars in revenue – and no one had a place to sit at the barbeque.

From the supply-chain perspective, business-to-consumer (B2C) home-furnishing disasters such as this hypothetical one could be avoided with the adoption of the right technology, improved customer service, better communication and a responsive last-mile system – all value-added services perfected years ago by the global integrators, such as FedEx, UPS and DHL. Increasingly, however, the solution to Mark and Miriam’s crisis is coming not only from the traditional integrators but from online retail giants such as Alibaba, JD.com, Walmart.com, and – especially – Amazon, which is able to control the transaction from purchase to final delivery.

As e-commerce rises to become a significant form of global retail transaction, shippers’ expectations regarding the performance of forwarders and other third-party logistics firms (3PLs) have never been higher, for both B2C and B2B transactions. Shippers want transparency in the supply chain and retailers want consistency of deliveries, both of which Amazon has perfected over the years.

“I think the retail world vastly underestimates how far ahead Amazon truly is,” warned Steve Wilson of Tompkins International, a supply chain consulting and implementation firm. For Wilson and other industry observers, there is Amazon, and then there is everyone else. Whatever fighting chance these other businesses have lies in adopting the right technology and adapting to market realities, because Amazon is “a technology company that also does retail,” he said, “and everyone else is a retail company that does technology on the side.”

However, there are methods – some high-tech, some quaintly old-fashioned – for 3PLs to deploy to keep up with the last-mile advancements that are the hallmark of the Jeff Bezos empire. Time is running out, but it may still be possible for forward-thinking logistics firms to address last-mile problems earlier in the process and remain competitive.

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