Moving goods in the future of mobility

By Derek Pankratz

It’s easy to envision self-driving trucks safely and efficiently carrying shipments down US highways. But that’s only part of any product’s journey between manufacturer and customer. How will the new mobility ecosystem handle the whole trip, including the trickiest part of all: last-mile delivery?

Today, the extended freight transport industry faces new pressures from multiple directions: Most customers want more, digitization makes more possible, new delivery concepts are possible in urban areas where destinations and recipients are concentrated, asset sharing may change the calculus of “ownership,” and alternative vehicle types may alter the ways in which time and labor influence the bottom line.

How can carriers not only adjust to these changing circumstances, but profit from them? There are two elements of the delivery journey they need to understand and re-master: ownership and visibility. The ways in which these two dimensions develop and converge to influence the first, middle, and last miles could have a deep influence on the fate of the transportation ecosystem.

  • Ownership of the delivery journey represents the concentration of asset ownership—in other words, the number of asset owners employed to complete the delivery journey. Today, ownership is relatively concentrated, but in the future, platforms will likely create opportunities for more diffuse ownership by increasing access to idle or less-than-full trucks. Private vehicles could even be incorporated. Ultimately, this would enable asset light models for some players while creating an environment in which niche transportation providers can proliferate.
  • Visibility into the delivery journey is a measure of the types of data available, the frequency that it is available, and the way that it can be used to make decisions. The rise of IoT technology and blockchain promises to create a high-volume and high-velocity data environment, and sophisticated analytics will likely create opportunities for insight such as dynamic routing and anticipatory shipping.

The farther you look down the road of speculation, the easier it is to indulge the imagination, and the fuzzier the details become. But there are compelling reasons to believe that the movement of goods, particularly over the last mile, will evolve through the future states we have described.

We already see companies actively looking for asset-light transportation models. And at the same time, the growth of digitization and analytics shows no sign of slowing, as companies continue to invest in the hardware, software, and capabilities required to build more transparency into their networks.

Given the potential pace of change in the last mile, retailers should consider making stores multipurpose, serving as showrooms and warehouses for goods awaiting delivery. More and more, sellers are using differentiated delivery to win customers through speed, tracking, white-glove service, and even high-end packaging. This can be especially important if transportation services are a critical part of your value proposition—for example, through omnichannel retail models.

For carriers, these changes in the ecosystem suggest they should consider refreshing partnership strategies to focus on the most forward-thinking customers to build mutual capabilities. For example, a carrier could work with a retailer to test drone delivery for select customers who value the fastest possible delivery and who fancy themselves early adopters of new technology. Investing in the fleet of the future is important, as well. Exploring small-scale pilots in targeted areas—perhaps where weather and traffic are predictable or charging infrastructure abundant—can be helpful. Finally, carriers should consider data as a differentiator. Increasingly, collating the data, analyzing it, and making a decision a day or week later is becoming table stakes; creating algorithms to make real-time decisions (for example, re-routing) could be the key to separating from the competition. For carriers, that likely means building capabilities to rapidly analyze and act on the information being collected and—just as daunting—creating a culture of data-based decision making.

Will your customers receive same-day, driverless delivery of every good they buy starting next week? Probably not. But these trends point ahead in very clear lines. To flourish, companies should trust in one of their oldest skills: seeing the road ahead.

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