Last-Mile Carriers Push Tech Providers Toward Innovation
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Last-mile delivery companies have always aimed for easy access to real-time visibility and advanced route optimization. And an increasingly pressing issue for both shippers and recipients is the need to better use their vehicles and make deliveries with lightning speed.
But along the way, logistics technology developers are finding that carriers want a balance of value-added features, cost efficiency, scalability and ease of use.
Steve Milroy, CEO of RouteSavvy, a Denver-based developer of route-planning software, noted that customers prefer value-added offerings to justify their cost; for example, a feature providing historical traffic data at a given location.
“I’ve seen some interest in traffic and real-time traffic flow,” he said. “You can look at historical traffic patterns, but… on the ground, it doesn’t necessarily work out that way.”
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Bill Catania, founder and CEO of OneRail, noted that its customers include shippers with their own in-house fleets who need to better utilize their assets while improving overall performance.
“Our first big customers all had their own internal fleet and were trying to execute delivery faster than their own internal assets could,” he said. “Another example would be fleets that aren’t utilized enough. We’ve had national retailers that have their own fleet [with] low utilization rates. So they leverage our capacity to the point where they can reduce the number of assets in their fleet. So instead of 10,000 vehicles at 30%, maybe they have 5,000 that are utilized at 70%.”
TQ Logistics stated its No. 1 need from technology is visibility in customers knowing where their product is at all times. (TQ Logistics)
Andrew Bounds, chief operating officer of TQ Logistics, said its No. 1 need from technology is visibility.
“Customers need to know when and where their product is at all times,” Bounds said. “They demand that. Twenty years ago, that was a big selling point. I’ve got this technology in the truck … and I can see where my freight is at any time during the day. It’s not a value-add anymore. It’s a requirement. Everybody has it.”
The carrier is finalizing full implementation of a TMS from a small provider.
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“It’s so critical that we’re able to plug in our routing and accept loads through our TMS system, and then have that uploaded into the onboard computers — the Samsara units — so the drivers have the routes and those systems talk to each other,” he said.
Hooksett, N.H.-based Merchants Fleet, a financial services company specializing in fleet management, deployed a platform, FleetShare, that caters to the last-mile delivery space.
“Our final-mile delivery partners have their own assets that they may own or lease,” said Jeff Nieman, senior vice president and chief operating officer, adding that the platform allows independence among the terminal and driver. “From a company perspective they’re able to match what is expected of them with what the corporate last-mile delivery company would put on them as a requirement.”
CXT Software has focused on breaking down the silos that leave various pieces of technology disconnected from each other, said Phillip Lechter, its vice president of growth.
“We are actively solving this with a unified logistics management platform that brings together the fundamentals of a TMS solution with the flexibility of integrations to bring together all their data and critical systems into one cohesive ecosystem,” he said.
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Fabio Luis de Paoli, chief information officer for DHL Express, said the carrier subjects any outside technology pitched to the company to stringent scrutiny, with long proofs of concept to ensure that its network remains stable and any platform that’s adopted works well with the company’s overall operations.
“If you’ve got a really good technology that we can use, you’ve got to have [application programming interfaces] that are easy to connect to,” he said. “It needs to be scalable across many countries. You need to have your information technology audited. They’ve got to put it through a difficult stress test.”
DHL said it is seeking solutions from the most efficient technology to get people communicating with more suitable options (DHL Express)
De Paoli noted communication challenges, especially in customs and border-crossing locations, caused by the increase of communication technology already available.
“People aren’t answering the phone as much,” he said. “They’re not paying attention to their texts as much because they get too many. When you’re clearing customs and need some information to finish that clearance, and we need to talk [to each other], that has become more challenging in the last couple of years.”
De Paoli stated that DHL is seeking solutions from the most efficient technology to get people communicating with more suitable options.
“If you don’t answer the text, we also have a mobile app,” he said. “If you sign up for the app, that’s good, but if you’re not a frequent receiver, people sometimes are tired of too many apps.”
For tech companies operating in the last-mile space, RouteSavvy’s Milroy said, it is key that recognizing that return on investment needs to be felt at both ends of the transport cycle.
“Being notified more efficiently when the driver is going to be at your location, this is more about customer service,” he said. “I think we’re seeing this and I’ve certainly seen it in larger companies. It’s one thing to make your fleet more efficient, and to do all this optimization, it’s another thing to really improve customer service.”
Catania said OneRail users often find their ROI in operational improvements.
OneRail's route interface. The company said its goal is help fleets better utilize their assets while improving overall performance. (OneRail)
“The time they were spending looking at a green screen took 10 minutes without any real capacity guarantee,” Catania said. “Then to manage the order without tracking, the customer starts calling and we were fielding between five and 10 calls per order. So there’s a huge amount of time savings.”
Another benefit, Catania noted, is the ability to choose certain stores in the fulfilling of orders to minimize the number of stops a delivery vehicle will have to make.
“Maybe there’s an order in full five miles further, so we can make a decision in split-second timing whether to dispatch closer to the customer or the next largest store,” Catania said. “The gap we’re filling is in that moment of transaction, like a credit card payment. That fast, we can make a decision of this store versus that store.”
For CXT, the return boils down to transparency and accuracy.
“From medical deliveries to high-volume retail drops, logistics providers shared that customers now expect Amazon-level visibility and proactive notifications,” Lechter said. “Failing to meet these expectations leads to churn. Our real-time tracking portal and customer notifications provide updates across every leg of the delivery. Carriers can offer customers full visibility without adding operational overhead.”
Merchants Fleet’s Nieman noted the biggest ROI comes in the ability to keep fewer vehicles on hand.
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“The cheapest vehicle is no vehicle at all,” he said. “If I can own fewer assets and still get the job done, it’s a massive savings. And it’s not just necessarily about the cost of the asset itself. It’s about everything that goes along with it when it’s not being utilized. Because when they’re sitting around idle, they’re vulnerable.”
The tech providers are working to speed up user access for information.
For FleetShare, that will mean a much simpler way to get access to a vehicle at the last minute.
“It’s a rental situation where you may have to go to a store and you’re getting in line, and you’re going through the hassle of renting a van, which is not a great experience and takes a lot of time,” Nieman said. “This is all digital and app-based, and the vehicles are within the proximity of the station.”
OneRail is working on its AI offering, Proof of Delivery AI.
“A lot of our B2B customers don’t get paid without proof of delivery,” Catania said. “So we trained the model to be able to determine if it’s a real photo that qualifies as proof of delivery. What’s the image of? A door? Or is it supposed to be a door but it’s an ashtray in a car?”
DHL’s de Paoli stated that automaton is better when it assists people, rather than replacing their jobs.
“I think in our business, those are not the answer and they’re a bit far from being there,” he said. “It’s not flexible enough. It’s not cost-effective enough. The route optimization, by contrast, is technology that helps the human. They’re experienced. We trust them. They know what they’re doing.”
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