The COVID-19 pandemic has changed the logistics sector for good. When looking at B2C last-mile delivery, many parcel delivery services have reported their best performance ever over the past few years. As customers were confined to their homes during various periods of lockdown, delivery services rose to the challenge of meeting huge demand.
Those who have their own global logistics network, owned and operated infrastructure, and proprietary systems, have seen enormous returns, allowing them to invest in enhancing their services to better meet the ever-evolving needs of customers, who now expect delivery in as little as a few hours.
Last-mile delivery logistics is a sector that doesn’t typically make large margins when compared with other industries, and with customers facing cost-of-living challenges, we can expect to see demand fall slightly. But while record profits remain the standard, service providers can invest heavily in customer excellence.
One barrier to meeting such high customer demand has been the global labor shortage, coupled with the scarcity of transport capacity. Ships lying in harbor, planes grounded, and trucks without drivers could spell challenges for an already disrupted sector.
Adding to this, tensions across the world have caused rampant supply chain disruption, which has added to chaos for the logistics sector, with geopolitical unrest creating several obstacles to delivering for customers. Supply chains are being restructured and reengineered to meet the unwavering need of consumers while navigating the factors affecting performance. For some, this means considering near-shoring – sourcing manufacturing closer to delivery locations – which also contributes to reduced environmental impact.
In fact, ESG will continue to drive the future of logistics, with the move to electric vehicles being a key opportunity for last-mile delivery to reduce carbon emissions.
Network, infrastructure, people, processes, and systems will define the logistics sector in the years to come.
With geopolitical tensions at new highs, the logistics sector must tread carefully when working with sanctioned territories. Transparency around supply chains, vendors, delivery routes, labor principles, and goods is non-negotiable for brands wanting to build and retain customer trust, and ESG must be a built into operations at every juncture.
Customers want ultimate flexibility on when and where they receive their parcels, and thanks to advancements in AI and automation, deliveries can be diverted when circumstances change. Chatbot technology continues to increase the availability of resolution services, though this must mature to be fully effective. Data sharing across supply chains must be seamless yet secure, especially during periods of disruption, labor shortages, and geopolitical unrest.
Next-day delivery is now the baseline expectation of customers across the world, with some customers expecting Q-commerce services in as little as an hour. Supply chain restructuring and near-shore, hyperlocal resourcing can cut transport times while reducing environmental impact – customers want fast service that doesn't cost too much.
Time & Effort
Algorithmic predictive analysis can inform local and global delivery partners on popular goods, locations and demand timing. This will help keep pace with Q-commerce and allow logistics organizations to intelligently optimize supply chains to provide goods at the right time, to the right customer, before they even know they need something.
Advanced data analytics will allow for hyper-personalized delivery services, with logistics partners able to predict demand by demographic and area, and increasingly by the individual.
With a lack of available labor to complete for customer-facing services like last-mile delivery, employees are already stretched to the limit. Customers expect the empathy they would experience in-store – colleagues across the supply chain must be well cared for to continue meeting customer needs and resolving issues with compassion.
The Customer Experience Leaders
Based on respondents to our 2022 survey, this year’s Hall of Fame sees Amazon Delivery take a top spot for customer excellence within the logistics sector. This is largely due to Amazon’s impressive ownership of supply chain--from production to last-mile delivery. Amazon is a retailer with the infrastructure, network and systems to meet the needs of customers on a global scale, uninterrupted by the challenges of a fragmented supply chain.
Also rising to the top in the Czech Republic, Packeta has become a global logistics powerhouse partnering with retailers to deliver to customers fast and efficiently. Partners use Packeta’s 92,000 pick-up points to service their customers, benefiting from the company’s tech-enabled supply chain. As its website claims, “new technologies are synonymous with Packeta,” which allows online retailers to collect shipments from solar-powered Z-BOXes if preferred.
Many global stalwarts in the logistics sector have reached the Hall of Fame for 2022’s CEE report, including FedEx, DHL and DPD. This speaks to the power of logistics providers being able to reinvest profits in strengthening their proprietary services.
Demand for Q-commerce is rising sharply, and logistics providers must think of smarter solutions to meet evolving needs. This includes reinvesting in infrastructure and capabilities across the supply chain. Customers want on-demand, seamless transactions that are flexible to accommodate their busy lives, and ideally full ownership of the journey from manufacturing to the front door will be key to retaining customer loyalty in years to come.