The evolution of final mile delivery

The strength of a retailer’s brand is now intrinsically linked to their final mile proposition; retailers win and lose market share based on the effectiveness of their delivery models. Consumer brand loyalty is often based on ease of use and retailers are heavily reliant on their carrier partners. This is why final mile logistics is now in the public’s conscience and the press is quick to highlight the failures of retailers, and carriers alike.

In order to keep up with the evolving expectations of consumers, significant investments have been made by retailers and carriers, often in partnership to evolve the final mile proposition. Tracking applications that offer more visibility and control via smartphones have been developed and the delivery options available from most retailers are now comprehensive. These include same day, next day, click & collect, parcel shops, locker boxes, and many more. Communication to consumers relating to their delivery has also evolved and can even allow them to defer a delivery at very short notice. The added benefit of this is that it helps reduce failures and associated time/cost as the driver simply routes to the next drop. 

In many cases, customers are paying for next day deliveries by way of minimum spend, but it’s also more commonplace to pay for the convenience of a defined slot, so you can plan deliveries into your daily life. Many consumers also pay for next day delivery via annual subscriptions which offer great value and reinforces brand loyalty. Free returns are the norm, but third-party logistics (3PL) consolidation centres, drop off points and lifestyle couriers, are helping to reduce costs for many retailers.

Crowdsourced delivery is an emerging final mile solution for retailers, that utilises networks of non-professional local couriers. This is now commonplace for many restaurateurs who historically didn’t want the headache of home delivery; crowdsourced delivery now forms part of their strategy adding a valuable income stream. UberEats and Deliveroo are two of best known in this market. Some parcel carriers have utilised ‘lifestyle couriers’ for years, a legacy of catalogue home delivery, but retailers are now experimenting with this option too. Theoretically, stores can be used as Forward Stock Locations (FSL) for a courier to pick an order locally and deliver for a small charge at very short notice. This is more advanced in the U.S. but will surely become more prevalent in the UK before long.

The pace of change in logistics has been driven by advancing technology that offers consumers more choice and convenience both in how they purchase goods, and how they receive them. Retailers and carriers continue to experiment within final mile to identify cost efficiencies, streamline processes and offer new solutions to consumers to gain a competitive advantage. 

Third-party logistics suppliers have played a large part in evolving returns processes by operating shared platforms which reduce the cost for retailers and support free returns. Clipper’s Boomerang offering is a good example of this. 

With the rise in the volume of home delivery, there has been a huge investment by parcel carriers into their hub, depot, and fleet infrastructure to cope with the increased volumes. The newest and largest sortation hubs are highly automated operations with people only feeding parcels in and out of vehicles. These complex operations are controlled by a sophisticated central control room and large IT departments that in turn provide the interface with retailers, consumers and depot networks. 

Environmental pressures are now starting to mount for home delivery operations. Clean air zones in UK cities will likely see an increase in electric vehicle use. DPD have recently opened their first all-electric depot in London and have committed to an all-electric delivery network in London. Starship Technologies are now making robot deliveries to households in certain postcodes in Milton Keynes. This technology is possibly better suited to campuses or more controllable environments but time will tell.

This is a challenging market to recruit for as there is a general skills shortage in logistics across all markets. In final mile, we see a shortage of talent in transport and warehouse operations, carrier management, network development, solutions design, and operational excellence.

It’s a fast-growing and innovative market with only a limited number of candidates that understand the volumes and pace involved in final mile, particularly at peak times such as Black Friday and Christmas. Historically, the home-delivery networks managed catalogue/mail order deliveries where expectations around deliveries were low. Today, e-commerce has transformed the UK home delivery market into a world-class operation that has grown exponentially. The demand for talent to support this has meant a change in the recruitment approach to explore the candidate market in different sectors. Many candidates have transitioned into fulfilment centres, parcel networks and carrier/3PL management from other environments, and the e-commerce/final mile space is now seen as an environment where candidates can progress their careers quickly.

This is where a specialist logistics recruiters can help. Building a network of active and passive candidates in the market allows us to support our client’s needs whenever they arise. Taking the time to meet and fully understand a candidate’s motivations means we can match them to the right opportunity and ensure our clients are well positioned to make a compelling offer. There’s intense competition for the best talent with counter offers being the biggest threat to any process. 

If you would like to discuss how we can help with your recruitment processes, get in touch with your local Michael Page office today. 

Business Director, Michael Page Logistics 

T: +44 121 230 9446

E: [email protected]