The rise of e-commerce has shifted the power to the consumer. Players like Amazon and Wayfair have raised consumers’ expectations of the final mile and given them that power.
“Today’s final-mile distribution model looks like this: line-haul and shuttles come from the distribution center into cross dock and from there to the consumer. And those destinations are largely residential,” said Mercure. “Or it could involve picking up at multiple retail locations and shuttling it to cross dock distribution centers and then going out on distribution routes to the end consumer.”
Today’s final mile is designed to meet consumers’ rising expectations. “And once expectations have been created we can’t go back,” he said. He pointed out the most obvious consumer expectation that carriers must respond to: end-to-end visibility of the shipment. “The big online retailers and the big delivery providers have set that expectation high. And when it’s met, it’s a more positive experience for the customer.” LSO’s Moyer agrees: “Full supply chain visibly is a key expectation from the customer. They expect to know when the package is in transit; when it hits their city and when it’s at their door.”
Industry experts, such as Jason Burns, Sr, of QCS Logistics look to the continuing trend toward providing retail home delivery at cost effective rates as another key consumer expectation that must be met. “Retail home delivery will continue to explode in 2017 and carriers need to find a viable solution to fully service this vertical or completely stay away from it. There’s really no in-between,” he said.
Reverse logistics is another process that delivery companies have to master in 2017. “Zappos kick started this one,” pointed out Moyer. “Their customers order several pairs of shoes; figure out which pair fits and then send the other two back. The cost of handling this reverse logistics process is significant for manufacturers and retailers and we’re going to have to figure out how to make this work cost-effectively all around.”
