With urbanization, cities worldwide grow fast. Changing consumer behavior is leading to new requirement in final delivery. Local distribution will be more frequent, faster, just-in-time and much more complicated. Smarter cities sharing open data, and better software capabilities, create possibilities for innovation in parcel delivery services.
More, and even more
Continuous growth in home shopping and peer-to-peer marketplaces will lead to more shipments in inner cities and in residential areas. Who will still have a kitchen in his small urban apartment? Shopping with your own car is so 2012…
At the same time the emergence of smaller convenient stores, so called ‘nano stores‘, 3D printing, renovation of houses and new personal health care concepts put even greater pressure on existing local distribution networks leading congestion, accidents and a poor air quality.
Local rules
Distribution in cities and residential areas should be invisible. Each municipality now sets its own rules for city distribution; environmental zones, strict time windows and special priviliges. The delivery truck should be a friendly guest in cities. The driver must carefully navigate through cars, public transport buses, pedestrians and cyclists. Only those drivers who really know their way around, and adhere to strict codes of conduct, will be welcome in cities. Having a drivers’ license is not a license to operate. We need local specialists using cargo bikes, small electrical trucks, local drop-of-point and perfect knowledge about their local consumers.
City distribution
Cleaner, more quiet, safer and smaller vehicles and cargo bikes will be the delivery vehicles of the future. A European study showed that more than 50% of city freight could shift from truck to bike. Vehicles, with their onboard computers, will be connected to local traffic control centers, avoiding congestion, road works and schools; intelligent transport systems.
European municipalities will have local, and specific, rules. This will not be easy for large parcel delivery services like TNT, DHL, FedEx, UPS and DPD, who seek to standardize their processes and systems for reasons of operational excellence. They compete on price.
Smart ICT
Traditional parcel delivery services are now getting competition from ICT companies like UberRush, powered by Google’s Uber taxi-app, and Shutl, which was acquired by eBay. They orchestrate the delivery of a package with the ease of booking a taxi. These taxis, or cargo bikes, can come right away, and deliver directly, or pick up a parcel and deliver later today or tomorrow. Local, experienced couriers do the job. The rates are very competitive. Could this be the answer to the need for more local customization of delivery services?
Not only Uber and Shutl are working on parcel solutions. Datafox listed 25 US start-ups with names like Post Mates, Zipments and Collect +. Also, European companies develop solution, such as the Belgian based City Delivery.
Venture capitalists are queuing up to invest. Worldwide, 40 percent of venture capital is invested in this type of software companies. Assets- and peoplebased companies are on the penalty bench, today.
Interesting developments are peer-to-peer Socially networked Package pickup Location Systems (SPLS) and CargoHitching. In SPLS, customers pick up their packages as part of their daily travel routine, acting as an agent on behalf of other online customers. DHL is experimenting with a crowdsourced parcel delivery system in Stockholm. Using an app called MyWays, people can deliver parcels to end consumers. Through DHL Freight’s network of service points in Sweden’s capital the service let consumers specify a time and place for delivery, as well as the fee offered for delivery.
Winners?
The winner takes it all. It will be a fierce battle between the vehicles and drivers of DHL and the bits and bytes of UberRush and Shutl. Or, may the two concepts actually be very complementary? Shutl, eBay and DHL could then be a ‘marriage made in heaven?’. I am curious …