#None #logistics #Last Mile Delivery #FarEye

FarEye's New Measures to Tackle Last Mile Delivery Costs

In the recent report from FarEye, it's highlighted that last mile delivery costs in the EMEA region have escalated by an average of 9% over the past year. Astonishingly, 96% of participating companies reported increased costs per delivery. This phenomenon, dubbed the “fragmentation tax,” arises from the disjointed nature of logistics providers and systems involved in last mile delivery.

Kushal Nahata, the CEO and co-founder of FarEye, stressed the importance of addressing this fragmentation, drawing an analogy to the shipping industry before the advent of containerization, which revolutionized freight costs. He stated, “Companies can outsource execution, but they cannot outsource responsibility for costs and customer experience.” Nahata believes that the last mile sector is awaiting its moment of standardization, similar to that of containerized shipping.

The report, supported by over 4,000 data points from more than 500 respondents, indicates that a staggering 51% of fully outsourced companies cited unreliable transportation information as their greatest challenge, in stark contrast to the 22% who listed rising costs.

To combat these issues, FarEye has outlined four essential strategies:

1. Pass the Control Test: Companies need to have clear visibility on the location of each delivery, understand the reasons behind carrier assignments, and grasp the associated costs without needing to make constant phone calls.

2. Identify Total Service Costs: This involves tracking exceptions, failed delivery attempts, customer contacts, and the transport costs per delivery to establish a comprehensive picture of operational expenses.

3. Sell the Promise: Companies should focus on providing free standard shipping, predictable delivery times, and paid express options. Reliability emerged as the most valued attribute for 63% of companies, while speed was prioritized by merely 11%.

4. Build on Trusted Data Using AI: There is a call for standardizing milestones, exception definitions, and costs while maintaining human oversight. This approach is aimed at enhancing efficiency and transparency across various carriers and systems.

FarEye’s platform aims to provide this transparency in real-time delivery costs across different markets and service providers.

This discussion on delivery challenges culminated in an event held from October 13-15 at the Mercure Amsterdam City Hotel, gathering over 100 executives from diverse sectors, including postal services, logistics, retail, e-commerce, manufacturing, automotive, telecommunications, and hospitality. Discussions were focused on practical solutions, with participants enthusiastically exchanging insights that would extend beyond the event itself.

Slavko Ovčina, CIO of Slovenia's Post, highlighted the necessity of open operational discussions, while Sebastian Bleser, SVP Supply Chain at Autodoc, underlined the importance of continued knowledge sharing across markets even after the event concluded.

Additionally, Nahata introduced the Last Mile Circle, an all-year community initiative aimed at collaboratively addressing and solving operational challenges faced within the last mile delivery sector. Leaders from the EMEA region joined founding members from the Asia-Pacific and American regions to foster a more robust support network.

In conclusion, as the logistics landscape continues to evolve, the strategies outlined by FarEye not only address the pressing issues of rising last mile delivery costs but also pave the way for more efficient and customer-friendly logistics across the EMEA region and beyond.