Last-mile has become a buzz term in transport, fleet and logistics sectors in recent years particularly amid the COVID induced burst in online shopping trends and the plethora of start-ups focussed on satisfying that demand.
“There is money flowing into this sector at the moment because there’s still great potential. So the capital investment, the private investment to support some of these startups is still available right now,” said James Lee, an associate partner at Argon & Co.
Argon & Co is a global supply chain transformation consultancy headquartered in Paris, France. It has 700 consultants globally, including some 70 based in Australia and New Zealand.
James was among the speakers at Megatrans, a conference and exhibition featuring transport and logistics companies held in Melbourne in August. I spoke to him on the sidelines of the conference to draw out his views on the future of the last-mile trend.
“It’s not as simple as getting a bunch of people who ride a bike to go and pick up some groceries. The backbone of these organisations is technology and that tech, whether it be bought off shelf and then customised, or built from the ground up, takes a huge amount of investment and time and money.”
Last-mile refers to the final mile, or really 10 kilometres, of delivery of a product to a customer from a strategically located warehouse. Imported and locally manufactured goods are delivered in bulk from ports and other facilities to the warehouse where they are then split off into small parcels for localised delivery by fleets of bikes or vans.
“The money is there at the moment, because if the industry does actually move to last mile as a greater percentage of service offerings in that space, there’s billions of dollars at play here.”
One of the brakes that may stanch the growth of investment in last-mile solutions is the cost of labour, which is rising amid inflation and staff shortages, said James.
One of the incentives though is the improved service offering a company can boast if they embrace last-mile solutions. James talked about a client that supplies automotive parts to mechanics and vehicle workshops and how they’re utilising telematics and software to ensure they have complete visibility of their fleet and the items they’re carrying.
“There’s great instances where they genuinely need speed because they’ve got a car on the hoist and they’ve identified the product they have is faulty, and an express solution in that instance, is something that I truly believe is a competitive advantage. Therefore the ability to provide a service above and beyond that value add is absolutely critical,” said James.
“There is a myriad of software solutions out there in the marketplace that effectively provide complete visibility of your own fleet, complete visibility of where they are at any given point in time, and give you the ability to be able to assign an order to that fleet in an optimal fashion that avoids any waste across your fleet or network.”
Of course, having warehouses in several strategic locations to supply proprietary products is something only truly gigantic businesses can afford to contemplate. So the future is going to include more and more businesses, even traditional competitors, coming together to be able to afford the investment in hardware and software to better meet delivery demands on fleets.“We need to reimagine the relationships and partnerships across supply chains, and business to business, as opposed to businesses to service providers,” said James,
