Omnitracs' Road Ahead blog

Innovating the final mile: From drones to drop lockers

Consumers’ perpetual and seemingly insatiable desire to get what they want now isn’t really new. We may give it names like The Amazon Effect, but meeting our desire for instant gratification (whatever instant means in that moment) has driven advancements in retailing, communications, technology, transportation, and economics throughout our history.  

Whether it was the creation of the Roman roads, the construction of clipper ships, the short-life of the Pony Express, the opening of the transcontinental railroad, the inventions of the telegraph and then the telephone, or the construction of what we now call the Eisenhower Interstate Highway System, the driving reason for each was to find a way to speed up the delivery of information and goods. And each such invention triggered massive changes in business processes and industrial systems in order to satisfy consumers’ demands and to capitalize on consumers’ willingness to pay to get what they want sooner than previously was possible.

Now, as we near the end of the second decade of the 21st century, the staggeringly efficient and effective supply chains that support modern commerce are being disrupted yet again. Emerging technologies and processes promise to reduce even further the time between the purchase and delivery while also making the actual delivery process more convenient.

In the process, those changes are beginning to force transportation and logistics companies — and retailers that either own them or for which they work — to rethink their distribution networks and practices. In some cases, the concrete in their massive new distribution centers located just outside of every major city is barely dry but they’re already studying new challenges that could require them to create new distribution models and adopt new distribution technologies. All to close the one big gap still remaining in the distribution channel — the last mile to final delivery.

Using technology to deliver products faster

With the on-going and rapid shift to next-day and even same-day delivery retailers, transportation companies and logistics technologies suppliers are testing a number of new delivery methods that not only might make rapid delivery common but also cheap. Currently, drones, typically defined as unmanned and remotely controlled aerial vehicles, are getting a lot of attention in the media for their possible widespread use as final-mile delivery vehicles. Ground-bound robots, perhaps with the ability to climb apartment building stairs, are being studied too. 

In Canada, Australia, and other parts of the world, a simpler but arguably more elegant solution to the final-mile delivery problem is becoming popular, especially in urban areas: drop lockers. 

Whether free standing in a public place or contained within a business that’s open for extended hours, banks of lockers would be available so that retailers ranging from the local super market and florist to big box electronics stores, could place items ordered online into a secure locker that consumers then access at their convenience.

But in each case — and there’s still no telling which approach or approaches will become long-term successes — the effort to close the final-mile delivery gap will impose significant changes on transportation system planners and operators. 

Say, for example, that drones become the favored solution. That could mean trucking companies might have to acquire specialized vehicles equipped with multiple drones that could be controlled by one or two “drivers” who take their truck to a single neighborhood location and then make a number of final-mile deliveries using a flock of drones that deliver goods from the truck to a dozen or more doorsteps.

Or, what if the drop locker concept becomes widely popular? Will that mean trucking companies must buy new vehicles, or reconfigure existing ones to operate more nimbly on tight city streets? Or will big, long-haul trucking firms have to create new divisions, or partner with different local delivery trucking companies to handle those final-mile delivery assignments?

And what does all this mean for the standard practice of big 18-wheelers pulling up to local stores’ loading docks? Will such routings even be necessary in a future when home delivery dominates and the concept of a consumer buying a product and carrying it home in their own vehicle becomes passé?

Final-mile innovations could also change our fleets

Currently, the final-mile delivery question is an open one, with lots of experimentation going on.

But clearly, it’s pointing toward a need for vendors to place large caches of inventory even closer to the end customer, disrupting the current trend in warehouse management and planning.

And since consumers are already showing that they aren’t, in many cases, willing to spend a lot more for the next-day or same-day delivery services, the last-mile delivery question also is pointing toward the need for increased automation up and down the supply chain. That includes increased and even smarter use of computerized inventory management and picking systems, robotic packaging and truck loading technologies, and even more technology-driven routing and truck management tools.

Finally, all of that, over time, could drive a need to change the size and kind of trucks that will be used to haul freight. While the big rigs we know today almost certainly will still be necessary for hauling large quantities of goods long distances, trucks used for shorter hauls and for final-mile deliveries may need to be smaller and configured quite differently. And all trucks, including the big long-haul rigs, almost certainly will have to become even more efficient and more reliant on technology to assist drivers in getting products to the market at the lowest cost and in the least amount of time possible.