At the end of August, Scalefocus hosted a webinar on a topic that has become a hot subject in 2020 like never before. Last-mile logistics is transforming and the urge for fast adaptation for logistics companies, retailers, carriers, and businesses has been accelerated tremendously because of the COVID-19 pandemic.
To delve deeper into the subject, we conducted a fireside chat with special guest lectors to determine how businesses in the sector can fit best in a world turned upside down and even become new leaders on the market. Georgi Boyadhizev and Varbin Dichev from Scalefocus were joined by Markus Reckling, Managing Director at DHL Express Germany, and Alex Hann, Head of Transport & Logistics at Bringg for EMEA. Watch the whole webinar in the video, or continue reading to grab the main points in the recap.
How Demand-Supply Patterns Change and Is There a New Normal
The fireside chat started with a short recap of the obvious: last-mile logistics is looking different in the COVID and post-COVID era and demand-supply patterns are changing. The question is: will they return to normal or have they changed inevitably, and what will the new normal look like. "We are definitely in a situation where we see a lot of movement in last-mile delivery and the b2c delivery process and in my opinion that will change even more.", says Georgi.
On his part, Alex Hann shared his perspective as a leader in a brand that orchestrates millions of shipments every day via the Bringg platform. He says that in his opinion, the so-called new normal is constantly changing, and "there is no normal right now". He marked the huge rise in shipment volumes over the last six months (500% globally) and noted that last-mile is "already driven by customer expectations and is not focused purely around cost, but also around reliability, flexibility and speed".
"Everyone in the logistics space has felt the need to optimize. We don't know how long the process will last, but we will have to adapt. We will absolutely will not be going back to the kind of volumes we have seen in the last months, but there needs to be a huge amount of innovation and change."
Alex says that there is, of course, a huge differentiation between well-prepared organizations or at least some amount prepared before the crisis with scaling with a digital infrastructure.
"It was those who were well-prepared that could adapt very, technologically very quickly - for example, to be able to bring new modules aboard, to move to click-and-collect, or curbside delivery, to have the interconnectivity of a much broader ecosystem that connects other third-party carriers as well as the crowdsource fleet."
Markus Reckling, as a Managing Director for Germany for one of the biggest providers of shipping solutions, has witnessed first hand the impact of COVID on supply chains, customers. He shared that he doesn’t think things are in a new normal yet, more like “somewhere between crisis 2.0 and crisis 3.0. Habits are changing,” he adds, “and I would say resilience will be a much bigger aspect of the supply chain than before.”
Leveraging Technology & Moving Forward
With the dynamic situation, businesses need to run towards a more efficient distribution channel, with available tech tools. Varbin shared that during the crisis, a lot of Scalefocus’ clients started looking at and rethinking their processes, how to make them more practical with the new possibilities of technology. Getting the whole supply chain communication, using the data, and getting new visibility to the supply chain are the accents in most businesses’ moving forward.
Alex says that there are three core parts to maximizing this:
finding the right technology partner
using technology and data to optimize the process
being more customer-oriented and having the perspective built around the customer
The data-driven and tech-driven partner is vital and “now, every business should be technology-driven”, according to Alex.
“To work quickly, be agile, and have the capabilities to solve initial challenges immediately.”
After the spike of deliveries in e-commerce and drop in b2b, there will be some balancing out, but b2c will stay high – at least that is the prediction. ” And that again comes back to technology and being data-centric and making intelligent decisions with this data. Technology enables businesses to grow and expand without significant investment in the operations.”
Being customer-centric is something both guests talked at length in the webinar, and understanding the customer experience is how “companies adapt towards the demand.” According to Markus, “It’s all about data” and good data integration with the provider gives the best experience that makes the customer comes back.
What Will Last-Mile Become in the Future
Safe to say, next years will be interesting for last-mile logistic; whether we will see big platforms take over or more shared-economy, asset-sharing type of business model, where it’s all about ecosystems with data orchestration (and businesses collaborating instead of competing).
Аccording to Varbin, the shared economy is an interesting idea and gives many possibilities for optimization, so businesses can see the demands and give the best solution. Alex added that “Utilization and collaboration network is a huge part of the future.”
He again says that the focus is driven towards consumers and it still depends on retailers and brands as they move away from brick-and-mortar traditionally and going online.
“This process should be taken more seriously now, as it’s more integral for the success of their business. They should know the future is here and it is vital for carriers, retailers, brands, logistics companies to be innovating.”
“Convenience, flexibility, sustainability, speed, resilience will be the keywords you need to think about.”
Аs for what lies ahead, Alex says it will probably be a mix of the big platforms (the “Amazons” of the world) and shared economy for the smaller companies, collaborations, and balance, “creating a delivery ecosystem without taking away the differentiation of the different service providers.”
Markus Reckling adds that “what we need is a culture of trial and error, nobody knows what the future holds, but we believe people should try new things – the more, the better.”