tech innovations in the last-mile delivery sector
TRANSCRIPT
Tech innovations in the last-mile delivery sectorin Southeast Asia
4 July 2017
Major challenges faced by logistics companies right now
Optimizing the last-mile delivery performance with
analytics
Building your own fleet: hybrid or hire drivers?
Speaker Introduction
TOPIC
Tech Innovations in the Last-Mile Delivery Sector in Southeast Asia
KEY POINTSMAARTEN HEMMES
Founder/CEO of CarPal
/maartenhemmes
A leading last-mile logistics
service & software solution
provider based in Singapore
SEA E-Commerce Growth Drivers
MARKETPLACE FOOD / GROCERY
TRANSPORTATION
LOGISTICS
Digital Habits of Modern Consumers
Rising Consumer Expectation
Amazon is endlessly expanding its control of the entire supply chain by acquisitions and R&D
PATENTS REGISTERED
Flying Warehouse
ACQUISITIONS (2017)
Underground Delivery Network
Multi-Level Fulfillment Centre (Beehive)
US$13.7B US$650M
US$20M Undisclosed
Undisclosed
Rising Consumer Expectation
Consumers want...
2016 2020
Speed(of booking & delivery)
Price(affordable & reasonable)
Immediate Customer Service
(of booking & delivery)
Transparency(of order & delivery status)
Last Mile Delivery Challenges
Small businesses will lose out in the long-run due to the inability to fully-utilize all resourcesavailable and lack of scale to finance the supply chain needs to be able to compete with
industry giants such as Amazon
Inefficient Operations
Speed of Delivery
Lack of new technology & automation
No transparency& visibility
Optimizing Last Mile with Analytics
With a smart centralized management system and leveraging a hybrid fleet, businesses would be able to optimize your operations while lowering your costs.
RouteOptimization
Predicting Volume& Seasonality
Alerts & SMS Messaging
Enhance Efficiencyat Lower Cost
Real-TimeTracking
Optimizing: Route
PICK UP....
70 Anson Road
DROP OFF....
Bedok North Street 3 (East)
Pandan Valley (West)
501 Orchard Road (Central)
PRICE: SG$57.21
Punggol Drive (North)
WITHOUT OPTIMIZATION
PICK UP....
70 Anson Road
DROP OFF....
Bedok North Street 3 (East)
Pandan Valley (West)
501 Orchard Road (Central)
PRICE: SG$57.21 SG$46.36
Punggol Drive (North)
WITH OPTIMIZATION
Saves 19%
Optimizing: Route
Optimizing: Live Tracking
● Clear, real-time overview of drivers● Ability to dispatch last-minute orders
● Switch delivery assignments if necessary● Predict delays
Optimizing: Predicting Seasonality
Slow
peak
Identifying/forecasting peak and slow periods to adjust fleet resources and assignments
Optimizing: Alerts & SMS Messaging
Keeping your customers informed by sending automated alerts when:● Order is placed● Item is picked up● Driver reaches the geo-fencing area (delivery zone)
● Last-minute orders (up to 15 minutes before pickup time) can be fulfilled
● Drivers have continuous jobs to keep it feasible ➜ lower driver costs
● Average driver takes 3~4 jobs per day (earning up to SG$500.00 per week)
● Database of 10,000 drivers ➜ 10% “very active” drivers on average
● Businesses can start reducing in-house fleet / fixed costs while growing the
business (more later on)
● Average fulfillment rate of 100% fleet of contractors ➜ > 98%
Optimization Results in Numbers
Building Your Own Fleet: Hybrid / In-House
By allowing businesses to...
optimize the routing of delivery orders
match the best available driver
The benefits include...
bringing the delivery costs down
gaining control over your own delivery fleet
having the ability to tap into third-party drivers, without having to purchase any vehicles or hire additional staff
Contractors v.s. In-House FleetHow to predict?
Case Study: F&B Company
CHALLENGES
● On-demand orders (up to 30 minutes)● Island-wide delivery● Delivery within 30 minutes● No in-house drivers or vehicles on balance
sheet● Up to 150 orders per day
● Customer paid around SG$20.00 per job
● Costs averaging up to SG$1000.00 per hour during
peak hours (50 × SG$20.00)
● Fulfillment rate of 90~95% using 100% contractors
● Customer pays around SG$18.00 per job
● Costs averaging up to SG$900.00 per hour during
peak hours (50 × SG$18.00), saving up to 10%
● Bringing the fulfillment rate up to >99% using 90%
contractors and 10% in-house
Case Study: F&B Company
BEFORE ANALYTICS
AFTER ANALYTICS
Case Study: E-Commerce (Company X)
Contractors v.s. In-House FleetHow to control the costs?
CHALLENGES
● Unpredictable volume● Island-wide delivery● Same-day delivery● 30 in-house drivers and vehicles on balance sheet● Between 250 ~ 1000 orders per day● Low margins (driver costs is a big factor)
Company X needs drivers during a random day at 10am and 4pm.Average costs are 30% higher due to inefficient eco-system ((driver idle time).
Efficient: Jobs are available every hour (lower costs per hour)Inefficient: Idle time (higher costs per hour)
Y axis: SGDX axis: active/idle
: Idle time
Case Study: E-Commerce (Company X)
Creating A Healthy Driver Ecosystem
X axis: company offering jobs per hourY axis: SGD
Healthy Last-Mile Ecosystem
BUSINESSES
CUSTOMERSDRIVERS
Thank you!4 July 2017