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On Demand Businesses 101

Automation and the Future of Logistics and Delivery

‘Change is inevitable in a progressive society. Change is constant.’ – Benjamin Disraeli

Times are changing at a rapid pace where both, technology and consumer expectations are gradually evolving, one leading to the growth of other, and vice versa. Mobile phones have taken control of our daily lives, and the magical growth of mobile internet has made instant gratification of consumer needs possible, aiding the growth of the on-demand economy. A quick, speedy delivery matters to the consumer of today. And, what matters to the consumer, matters to the business.

 

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Needless to say, logistics industry has taken off with speed, and innovation has given it the the necessary, technologically-equipped wings to expand and fly high. A recent report by Transparency Market Research reveals that the logistics market in terms of revenue was valued at USD 8183.46 billion in 2015, and is expected to reach USD 15522.02 billion by 2023. In terms of volume, the market was valued at 54.69 billion ton in 2015, is expected to reach 92.10 billion ton by 2024.  The market is booming along with the growth of the on-demand economy, the latter clearly disrupting the former.

Responding to the changing scenario, numerous logistics firms, big and small, have risen up, helping the on-demand economy operate with ease. What’s more, a lot of online biggies are strengthening their own logistics and delivery arm, trying to manage the load within and eliminating the need to outsource. The miraculous upsurge in the industry has attracted a good deal of attention from the leading investors, as venture capital firms in 2015 pumped more than $17 billion into 214 companies having some kind of on-demand delivery component. The logistics industry alone garnered more than 13 per cent of all VC investments during the year. That’s quite a lot!

Drones

All seem to be on toes to enhance this extremely vital function essential for growth. Amazon, the e-commerce mammoth, has been taking gigantic steps to make its platform delivery-efficient. Starting with Prime, a free and quick delivery service, the company has successfully introduced too many things – an Uber-like crowdsourced delivery service, robot-powered warehouses, own fleet of trucks, etc. It’s planned drone delivery service, Amazon Prime Air, seems to be a massive invention, bound to revolutionize the delivery space. The drone delivery service by Google Wing and Walmart is also set to kick off soon, the necessary permissions being awaited.

The start-up scenario is pretty similar too; Matternet, has recently partnered with Daimler (Mercedes Benz) to introduce warehouse-like delivery vans to launch drones from their roofs for last mile on-demand delivery. Similarly, Zipline, a San Francisco start-up, through a partnership with Government of Rwanda, is looking forward to introduce unmanned drones to air drop medical supplies to different hospitals of the country. Flirtey, a delivery start-up, is working with Dominos to deliver Pizzas using drones in New Zealand.

Delivery Robots

There are others who are pretty unique and are riding high on innovation. By introducing delivery robots, remotely monitored by an operator, they look forward to strengthen their last-mile deliveries. Pioneers of this adoption, Postmates and DoorDash (food delivery start-ups), in partnership with Starship Technologies, have recently introduced super-speedy autonomous robots, with an aim to delight customers with faster and more convenient deliveries. Online take-away food service, Just Eat has also recently begun to implement the same in UK, the first robotic delivery having taken place in December last year.

Driverless Delivery Vehicles

The introduction of driverless cars is another breakthrough innovation to simplify the complexities of last-mile delivery. Google, world’s most advanced search engine, has successfully been running a pilot on Autonomous Vehicle delivery since February 2016.  The vehicle consists of different compartments carrying deliveries of different customers and the security code of each compartment is only available to the respective customer. The process of payment is also pretty simple, as the vehicle comes equipped with a credit card slot or a chip reader. Similarly, Uber under the brand name Otto, has been using driverless trucks for deliveries. The truck, fitted with sensors worth $30,000 dollars made headlines, as it drove to make the first autonomous delivery earlier this year. Have said that, the adoption of autonomous trucks by the on-demand industry seems challenging, due to traffic constraints and accidental risks involved in the space.

Advanced Delivery Algorithms

While the adoption of Drones, Delivery Robots or Autonomous Vehicles might still be debatable, the adoption of automation algorithms for delivery is a certainty. Data continues to be at the heart of delivery automation and optimization, and Machine Learning and Data Science play an extremely crucial role. The primary innovations that these advanced tools offer include task-order matching, dynamic route optimization algorithms, geo-analytics and fleet or now delivery bot tracking.  Tookan, is one stand out solution which is helping customers automate their entire delivery chain. Using Tookan, incoming delivery requests in the form of emails from customers are automatically translated into tasks using the Email parsing feature. Those tasks can then be automatically assigned to one of the drivers using Geo-fencing,driver availability or other custom rules available . Further, the drivers delivery route is automated based on route optimization algorithm taking into consideration mileage, capacity, driver hours and total stops.

 

Logistics firms, being the leaders in technology adoption, have climbed the wall of fame to reach the winning side. By making efficient use of multiple automation features, the operational costs are being brought down. A disruption seems to be on the cards, with all players participating in the race with full vigour. The future is uncertain, unpredictable, and a lot more, but with the promise of being advanced and more convenient. Is it a small beginning of a bright future for the logistics and delivery space? Time will only tell.

 

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