Legacy Systems, Lack Of Visibility Hampering Last-Mile Delivery Providers

The last-mile innovation continues, and retailers are jumping on the bandwagon in a big way. According to a new report from last-mile logistics provider Bringg, 64% of respondents said they are planning new premium services and service plans to increase business.

"This past year has forced retailers and service providers to assess their supply chain agility and resilience," said Guy Bloch, CEO at Bringg. "While they want to take advantage of growing opportunities in the world of e-commerce, they are challenged by legacy systems, limited visibility and high operational costs."

Automation of delivery has been a hot trend for retailers and 61% of survey respondents said that was their top wish list item from shippers, but 20% said they had abandoned automated scheduling and self-scheduling because it was too expensive. Still, 54% of logistics providers are focused on adding automation and 41% have already done so, the report found.

Cost was the primary driver for abandoning projects such as automating driver workflows and improving visibility. However, visibility continues to be a big ask, with 53% saying their shippers use or request real-time tracking for end customers. The report found that only 18% of logistics providers are offering real-time visibility.

The State of Last Mile Logistics report surveyed 200 logistics leaders across companies ranging in size from 200 to 50,000 employees in eight countries in North America and Western Europe.

Over 60% of logistics service providers saw increased demand for last-mile delivery, but a lack of visibility, automation and innovative tech is holding them back, they said. Forty-one percent said their biggest challenge to scaling last-mile operations is outdated business processes and manual operations, followed by legacy technology (36%). Legacy technology was more likely to be an obstacle at larger firms, with 48% of those responding from companies with 1,000 or more people calling it their greatest challenge.

When asked what technologies logistics service providers planned to purchase, automated driver workflows through a dedicated app was cited by 42% of respondents as an item on the agenda for 2021; an additional 26% said such technology would be purchased within 24 months.

Order batching (41% in 2021, 10% within 24 months), automated dispatch and routing (37%, 5%), and automated self-scheduling for customers (28%, 29%) were also highly sought-after technologies.

Technology that prioritizes dispatching based on the cost to deliver was named by 52% of respondents, with 22% saying they planned to purchase that technology this year.

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Finally, respondents were asked what technologies they felt could best improve driver retention. Visibility into the requirements for each stop was named by 27% of respondents. An additional 25% cited automated driver payment technologies and 19% said dynamic routing software.

"As delivery volumes grow and new services become more popular, the delivery itself becomes more complex. Drivers need tools to handle deliveries where every order may contain different requirements, such as digital proof of delivery or over-the-threshold delivery," the report said.

The report also asked about sustainability. The result showed that U.S.-based retailers lag their European counterparts when it comes to sustainability practices. In the U.K., 88% ranked sustainability as a high or very high priority. That number dropped to 74% in the U.S.

On Earth Day this year, Bringg introduced the BringgGreen Sustainability Tech Practice, a suite of tools to help retailers reduce their carbon footprint. The Sustainability Tech Practice offers solutions that focus on green fleet selection, carbon reporting, transparent internal and external sustainability communications, and business innovation.

The report also found the approach to sustainability differed based on resources and company size. Larger logistics firms are looking for electric vehicles to play a key role, while those with 500 people or fewer were more likely to incentivize customers to pick a sustainable shipping option.

The entire State of Last Mile Logistics Report can be downloaded here.

Click for more FreightWaves articles by Brian Straight.

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