Guest Column | September 10, 2020

How Will Last-Mile Logistics Change After The Pandemic?

By Megan R. Nichols

Corona COVID

Streamlining last-mile logistics is an ongoing goal as companies figure out the best, most reliable ways to get goods to consumers without delays. The COVID-19 pandemic drastically impacted e-commerce and the associated deliveries, especially as more people began shopping from home to avoid leaving their houses.

However, there are some pandemic-related changes likely to persist after the worst of the health threat passes. Here are some of them.

More Underperforming Retail Sites Will Become Microdistribution Centers

People specializing in last-mile logistics explore how to get products into consumers' hands as quickly as possible. That often means physically bringing the products closer by converting unused facilities into last-mile delivery warehouses.

Statistics show that approximately 13.8 million square feet of former retail space has been or is being converted to 15.5 million square feet of industrial space. The same source indicated that 59 such projects got proposed or completed since 2017. The same metric measured last year showed only 24 such projects. Even if fleet managers are not directly involved in the transformations of those buildings, they must begin anticipating more activity at these smaller distribution hubs.

Analysts believe COVID-19 will accelerate those conversions, especially since the pandemic made people more eager to shop online. Reports also say that discussions between Amazon and the Simon Property Group could lead to the e-commerce giant taking over some mall space to create distribution centers. Such arrangements could give struggling industrial property owners another option if their foot traffic levels stay down after the pandemic eases.

Logistics Companies Will Pursue Sustainable Options More Aggressively

It's difficult to see the positive side of crises like COVID-19, but one that emerged rather early on relates to the planet's sustainability. People who lived in smog-filled cities marveled at seeing distant mountains for the first time, despite residing there for years. They also reported that reduction in boat traffic on waterways allowed seeing fish swimming below the surface. These quick shifts made some people realize that COVID-19 could provide a sustainability reset.

Making those kinds of gains requires collaborating to achieve shared goals and empowering stakeholders to play a well-defined role in the eventual success, among other things. Logistics companies were looking at more sustainable delivery options before the pandemic struck. In the post-COVID world, we can expect those possibilities to become even more prominent, especially since people saw that sustainability gains happened quickly during lockdowns.

How can last-mile deliveries keep that momentum going? A pilot in Dublin, Ireland, could pave the way. UPS replaced five of its diesel trucks with quad cycles and powered walkers. This switch reduced carbon emissions by up to 45 percent. Turning toward more deliveries distributed by people who walk or use bikes keeps road congestion down. Moreover, these new options — which have removable cargo containers — are scalable solutions and purpose-built for urban areas.

Successful Professionals Will Plan For Unprecedented Growth

People often look at last-mile deliveries and COVID-19 as if the pandemic caused completely unexpected upticks in delivery and shipment numbers. The reality is that it only sped up events that were already happening.

One recent report expects 2.1 billion people to buy goods online by next year. It also predicts a 78 percent growth in urban last-mile deliveries by 2030. The analysts responsible for those statistics forecast that companies and the industry at large must carry out significant measures to avoid adversely impacting the quality of life in urban centers due to the jump in deliveries from e-commerce stores. They clarify that more delivery vehicles lead to higher emissions and more congestion.

The researchers stressed that there are many potential interventions — ranging from vehicle changes to secure delivery options. Some also involve customers doing things differently. One possibility has them traveling to one building where multiple carriers send deliveries for recipients to retrieve. It's not clear what changes will gain the most traction in the coming years. One evident thing is that logistics professionals must think ahead now to avoid falling behind later.

Delivery Crews Will Offer New Services That Prioritize Safety

Public health officials warn that the coronavirus could remain a health threat for years. Vaccines must pass through various stages to demonstrate safety and efficacy. There's no guarantee of finding at least one successful option, and even once that happens, doses will not be immediately available across the world. Those things all indicate that hopes for a true post-COVID-19 society won't come to pass anytime soon.

Several companies that handle last-mile deliveries for furniture businesses weighed in about how the coronavirus affected their services. Their insights could also apply to delivery personnel in other sectors. Some started offering a "choice of room" service, where customers could select where the driver left their items. The buyers had to unbox the merchandise and discard the packaging, but some preferred that because it reduced the amount of time spent face-to-face with strangers.

In the early stages of the pandemic, some companies suspended white-glove service, while others kept offering it but noticed a dramatic drop in the percentage of customers requesting it. More people began availing of it once lockdowns eased, but delivery drivers only provide it at a distance and while wearing gloves. Fleet managers and companies involved in last-mile deliveries must explore how they can keep customers happy without sacrificing safety.

Customers Will Adjust To And Prefer New Delivery Options

During the early stages of the coronavirus pandemic, many companies began offering deliveries for the first time because doing so was the only way to stay profitable. Retailers and restaurateurs can enhance their services by partnering with companies that provide last-mile deliveries. Many did it to comply with local lockdowns that prohibited providing in-person service, but let delivery, pickup, and takeout services continue.

Many areas are reopening, but that doesn't mean consumers are ready to frequent the businesses. A recent poll of Seattle diners revealed most felt uncomfortable with eating out right now. It also showed that a third of respondents would not do so before a viable treatment or vaccine became available. Concerning shopping in stores versus getting things delivered, it's easy to see why most people would stick with the latter.

Considering that a growing number of companies offer fast deliveries at low costs, people will frequently conclude they'd rather choose delivery than go to stores, especially due to the time saved. The pandemic arguably introduced more people to home shipments. Last-mile specialists will need to accommodate the fact that many may decide it's not worth the trouble to go back to eating out and shopping as they once did.

People Will Prefer Online Shopping Even More This Holiday Season

2020 has felt like such a strange year for many people that it seems as if all the days, weeks, and months blend into a single period of weirdness. However, some traditions persist despite the uncertainties associated with the pandemic. One is holiday shopping.

Research published in July 2020 about consumers in the United States indicated that one-third of people who normally shop in stores on Black Friday would not do it this year. Moreover, nearly three-quarters of respondents reported they'd buy online more this year than they had previously.

Last-mile deliveries tie into these statistics, especially since holiday shopping has an urgency associated with it. People appreciate delivered items, but they quickly become frustrated if the merchandise arrives late or damaged. Fleet managers should start working out the specifics of this holiday shopping season now to have the best chance for adequate preparation. Internet shopping for the holidays is not new, but COVID-19 seems set to make the option even more desirable.

Adaptability Is The Key To Success

No one knows precisely what the post-COVID-19 world will look like, but the trends here help people have a clearer idea. Since so many unknown factors still exist, logistics professionals should remain as flexible as possible when catering to last-mile delivery changes on the horizon. Thinking ahead and having a responsive mindset go a long way.

About The Author

Megan R. Nichols is an industrial writer for sites like Thomas and IoT Evolution World. Megan also publishes easy to understand manufacturing articles on her blog, Schooled By Science. Keep up with Megan by subscribing to her blog.