The Last Half-Mile

One evening last week, I came home to find two separate deliveries waiting on my doorstep. Both had been delivered in error. The first was a bunch of flowers, but the named recipient, the street address and the suburb were all incorrect – it was for someone else in another postcode. The second was a packet of coffee beans (part of my monthly subscription), but I had already received the same delivery the day before – so this was clearly a duplicate. Welcome to the perennial logistics challenge of the “last half-mile”.

Delivery-on-Demand: 5 years ago, Auspost was experimenting with drone deliveries (image sourced from IT News)

It seems that despite the increased demand for on-line shopping and home deliveries during lock-down, supply chain logistics are still struggling to find a consistent and reliable solution. Coincidentally, in recent weeks I have been pitched two different start-up ideas that aim to address the last half-mile challenge for e-commerce. Although they are each taking slightly different approaches, both start-ups are trying to address the “recipient not at home” dilemma – what to do with parcels and deliveries when there is no-one at home? Their respective solutions revolve around a “localised point of collection/delivery” – either using a more convenient network of click & collect facilities, or a network of trusted neighbours to receive deliveries on your behalf. I have previously covered another Melbourne start-up called Passel based on a network of trusted local couriers – but it doesn’t seem to have progressed very far.*

So if this is a recurring theme, why can’t it be fixed – or are the solutions out of step with the actual problem? Or is the problem not that big of an issue to warrant over-engineered answers? In attempting to provide constructive feedback to both the recent pitches, I gave similar responses in each case, which can be summarised as follows:

Using a proxy recipient still does not solve the problem of items being delivered to the wrong address (or wrong items delivered to the correct address). In particular, it doesn’t address the issue of Australia Post personnel carding an item as “not at home” when in fact they simply can’t be bothered to attempt delivery and prefer drop it off at the local Post Office for collection – believe me, I have had more than my fair share of those.

Localised click & collect services already exist – usually in convenient locations, and often accessible outside Australia Post’s normal hours. Plus more parcel locker and similar services are appearing – so is the demand really there for another delivery solution?

Who is responsible for insurance claims on lost or damaged packages, where the named recipient (who has the sales contract with the seller) does not match some of the relevant transaction details associated with the proxy recipient?

Likewise, if you are using proxy delivery or collection services, who is responsible for managing returns and/or unclaimed items? Some retailers will take items back and offer refunds as a matter of policy – but others won’t or can’t process returned stock, and end up re-selling into secondary supply chains at a discount.

How do you recruit and screen proxy recipients and deliverers, and build trust into the network? How do you avoid an under/over-supply of proxy providers – too few and the system gets choked; too many and it’s not worth their time and effort to sign up.

How do you recruit and service multiple retailers and/or their point of sale and fulfillment providers to make it a viable service for customers who wish to shop from multiple shops and brands?

Who (and how) do you charge for the additional convenience you are trying to offer – retailer, customer, or both? Suggested options include a per transaction fee and/or an annual subscription fee, or a check-out fee which can be rebated based on loyalty or other frequent buyer rewards. But the “convenience premium” cannot be disproportionate to the value of the transaction.

Even with more customised delivery options such as trusted neighbours, the issue of having to be at home during quite wide delivery hours (e..g, 8am to 1pm, or 9am to 5pm) still applies.

Confirming proof of delivery is still a pre-requisite – even more so if using proxy delivery addresses – and potentially adds another layer of complexity.

Finally, the need for immediate “Delivery-on-demand” may be overstated, at least on non-perishable goods, so a constant stream of delivery drones down every suburban street is probably some way off….. but maybe don’t rule it out if we have further pandemic-related lock-downs or continuing challenges in the COVID vaccine rollout.

* Similarly, I also blogged about other customer experience with the final step in fulfillment across a number of sectors, including e-commerce.

Next week: Notes from Blockchain Week