The Last Mile parcel boom
Lockdown II is here like the sequel no one wanted, and once again we’ve lost the dubious privilege of hitting the high streets for our Christmas shopping. Fortunately, heroic Last Mile Delivery providers have got our backs — and for them, business is booming.
I noticed something this morning while walking to the German Autolabs office in the center of Berlin. In almost every street, you could see multiple delivery vans from DHL, Hermes, DPD, UPS, or one of the many white label local logistics companies.
In the era of the new normal it’s more normal than ever to bring essential food, medicine, clothes, video games, home gym equipment, sex toys (in Germany, there is no such thing as embarrassment) and so on via the post. All of which means that we’re in line for a white hot Christmas in retail logistics.
Delivery drivers are working frantically to cope with demand, while logistics companies are struggling to hire more drivers. According to Transport Online, around 30,000 additional workers will be employed before the Christmas holidays to cope with this anticipated parcel boom.
The Big Players
“This year we are expecting a parcel boom the like of which we have never seen before,” said DHL CEO Frank Appel in response to reports that the group has posted a significant jump in Q3 profits.
According to wiwo.de: “If everything runs smoothly and there are no nationwide lockdowns in key regions by the end of the year, Deutsche Post could even reach the upper end of its increased profit margin for 2020. Appel also raised his forecast for free cash flow in 2020, where he now expects to generate more than two billion euros.”
It’s a very similar story at DHL’s competitors across Germany. Financial news organization Handelsblatt forecast similar growth based on figures from DPD and Hermes. According to trade insiders etailment: “Against the background of rising corona case numbers, more shipments are likely to be delivered at the end of the year than ever before.”
“Hermes expects 120 million parcel deliveries in the last quarter of 2020 — a fifth more than in the same period in 2019, while GLS expects an increase of more than 100,000 parcels per day. According to the forecast, the parcel logistics company intends to increase the workforce in the sorting centers and delivery departments as well as significantly expand the fleet of delivery vehicles. Some of the costs will be passed on directly. DPD, for example, will charge corporate customers a surcharge of 75 cents per parcel from November to Christmas, while Hermes will charge 25 cents more.”
Amazon has doubled its net profit year-over-year to an astonishing $5.2 billion (up from $2.6 billion for the same period in 2019). Each year at Christmas, Amazon extends the return periods for purchases until January 31 of the following year, but the company is preparing for a longer Christmas than ever before. The Early Black Friday Sale started October 26th, a full month before the official Black Friday on November 27th.
The big players in Last Mile are opening up unexpected revenue streams and returning vast profits in the race to fulfil the needs of Last Mile Delivery–but local deliveries are also experiencing a surge in popularity and demand.
Beyond Parcels: Local Delivery
Business successes in the Last Mile scene have notably come from the food delivery vertical. Lieferando continue to lead the way, posting profits up from 80 to 160 million euros. Again, demand during the pandemic has almost doubled. Growth of this magnitude has across Lieferando territories, including Netherlands, England and Canada.
So thanks to Deliveroo, Lieferando and friends, we’re all accustomed to the delightful modern world luxury of ordering dinner on an app and having it turn up at the front door 30 minutes later. But what happens if you need groceries? And what if you don’t have time to burn — you need them in 10 minutes, max. Time to check out Gorillas, who claim to do exactly that, even on a Sunday. This is “A Big Deal” in Germany. Such disruptive service provision has taken off in the USA too, with Softbank reportedly dropping a cool 750 million dollars in Gopuff, the American version of Gorillas.
Anxious not to be left behind, and inspired by the fast-moving startups, German supermarket behemoths like Rewe have expanded their delivery options to deal with pandemic demand, as reported by Tagesschau. And when the pandemic finishes, we’ll be left with more Last Mile logistics choices than ever before.
Changing the game
At German Autolabs we’ve long seen the need to support Last Mile logistics, especially as their working environments become ever busier and more demanding. We’re bringing voice assistance to professional drivers and allying it with AI augmentation, helping to onboard drivers faster than before, and making sure that when they hit the road, the drivers have a useful assistant by their side.
For Last Mile operators, voice assistance can make a crucial difference in the KPI race to tackle chance of first delivery success, time per stop, driver churn rate, and ultimately customer satisfaction. To find out more, visit the website at: www.germanautolabs.com
Stay safe and well, and as always, thanks for reading!