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    Analysis: Who Should Bear The Cost Of The "Last Mile" Of Express Delivery?

    2014/3/22 14:02:00 245

    ExpressCostAmazon TaxRetailerSupply Chain

    You will be happy to let others open the trunk of your car and put your groceries in it when you are not in the car. You will trust any stranger to buy a new pair of shoes when passing your house shoes Delivered to you. You will be willing to accept the prescription drugs ordered from a UFO hovering outside your house. All of this is to avoid walking an extra mile and collect cheap goods ordered online in person.


    But all these choices need money, and those lazy and impatient Internet consumers are unwilling to pay the money. If it is clear that UAVs are not feasible except in the most remote areas or under the most special circumstances, then the "automatic air courier ”The frenzy of excitement will fade away. Express delivery will be mainly concentrated in the office, because many people spend most of the day there. This raises the question of who should bear the "last mile" cost for Internet consumers: consumers, mailrooms, retailers or delivery companies.


    In the past, retail supply chains were much simpler. The goods delivered to the supply hub will be delivered to a limited number of stores in large quantities, which can save costs. E-commerce has facilitated the shopping of consumers, but it also highlights that the shortest step in the whole process is the most difficult to replace - all of us had to go through this step before we went shopping with iPads in the sofa.


    There are a lot of innovations that try to build a bridge between the warehouse and home. Including Volvo's“ Roaming Express ”(roam delivery), drivers can activate one-time digital keys with their mobile phones, and arrange couriers to store groceries on their cars. In New York, start-up Zipments acts as a middleman between the network of consumers and free couriers. Walmart hinted that it might offer discounts to consumers who agree to send goods home to other consumers. This practice combines "crowd logistics" with the sharing economy, which is similar to the service piloted by Deutsche Post DHL in Stockholm. In Brussels, TNT Express is piloting the "mobile warehouse", which is a trailer that enters the city center every day. A team of electric tricycles with signs will deliver the packages on the trailer. In developing countries such as Indonesia, online retailers are building their own network of couriers. These couriers' understanding of the local environment can overcome problems such as lack of infrastructure and unreliable delivery addresses.


    Roel Gevaers of the University of Antwerp has been analyzing the "last mile" of innovation from enterprises to consumers. He pointed out that consumers usually pay express delivery fees for goods priced more than 75 euros or so and receive goods at home. If the goods are lower than this price, they would like to get a fast and best free delivery service. If the delivery fails, the delivery cost will be increased, and the defective incentive measures (pay the subcontractor only based on the successful delivery) will bring terrible results: fragile pieces will be stuffed into the mailbox, clothes will be left in the dustbin (and not surprisingly recycled as waste), and flower bouquets will be thrown on the fence of the garden.


    The shock wave of the first retail revolution led to the failure of the first "last mile race" in 2001. At that time, Webvan, an online grocer, declared bankruptcy due to misjudgment of service costs. Retailers may eventually refuse to provide free express services. Consumers may think that it is easier and safer to buy goods in traditional stores (as most people are still doing), rather than click to pick up goods with the mouse, and then wait all day for unreliable express delivery, or gamble on the experiment of a start-up. But this time, it seems that online shopping will continue to exist, which is the meaning of delivering goods to the office.


    Delivering goods to the office can eliminate delivery failure, allow the courier to deliver more goods at one time, and combine the enterprise and individual parcels for distribution, which can reduce the cost by 30% or 40%. However, at present, it is the office building or tenant that pays the express fee. Last Christmas, PwC said that its staff in the London mailroom, like "Santa Claus", distributed gifts ordered online to the accountants in the office. However, even fairies have their own limitations.


    If employees are prohibited from accepting package (Some companies have already done so), or let them pay for this benefit, that would be a bit ruthless. The office building should recover part of the cost from the e-commerce company, because the latter used its overloaded internal mail room for free. Employees will receive goods in the office, and retailers can pay for additional services, such as paying for the supply hub to return unwanted online shopping goods to consumers. At the same time, the criticized mail room (once threatened by e-mail) may even become a profit center. Now it is“ Amazon tax ”It's time.

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