As our cities become smarter and customer demands evolve for faster and more convenient deliveries, the technology powering the transportation services have to evolve to meet the customer needs. Constantly changing times are demanding e-commerce companies to manage complexity and scale to be able to serve our customers with same-day or one-day delivery promises.
Given the high number of variables involved in arriving at an optimal routing decision, moving the product between suppliers, fulfilment centers, sorting facilities, and delivery stations could be a complex process. To make more fast, reliable and efficient customer deliveries, companies should equip themselves by investing in technology and improving their transportation network and supply chain verticals.
From storing products at warehouses, to handling and transporting them, whether by road, rail, water, or air, technology plays a crucial role in shipping goods to customers. Indian substantial logistics sector is growing at a remarkable rate due to changing customer expectations, and e-commerce companies should capitalise on it better to stay ahead of the game.
Technology at the centre of it all
As we evaluate the merits of each transportation option — surface, rail, or air — and determine the most effective route, we realise that improved technology continues to influence the future of mobility, enabling enhanced in-transit visibility and delivery of orders. Although IoT isn’t a new technology, it has been a game changer in transportation and logistics. Data analysis from tracking packages and vehicles at every stage can help minimize delays, manage processes remotely, predict risk and challenges, ensure accurate cargo handling, and even forecast traffic congestion, among others.
Furthermore, connected fulfilment and transportation technology that can optimise delivery speed, reliability of service, and cost of operations is going to enhance the customer experience, thereby fuelling the next phase of growth in the e-commerce segment. Geocoding, mapping technology, and infrastructure have allowed companies to calculate precise delivery windows, enable GPS monitoring, including the tracking of delivery vehicles in real time, lower freight expenses, and increase transparency in their operations. It can also help during a crisis. For example, if a vehicle has broken down, the technology enables you to identify the crisis and come up with alternate solutions like sending a replacement vehicle or aid to the location.
Vehicles can be equipped with truck routing solutions on smart devices such as tablets or mobile phones. Routing solutions enable drivers to receive regular updates on routes where there is no wireless coverage and also enable them to define the shortest and fastest routes, assign stops manually, save maps with routes, and share them with other drivers. A routing system minimises fuel consumption, resulting in considerably lower emissions.
Artificial intelligence (AI) and machine learning (ML) have also been playing significant roles in transforming the future of the transportation and logistics sector. It can be used to find routes that use less fuel, lowering CO2 emissions. The technology can help identify trends, forecast demand, reduce human error, predict demand, assist in workforce planning and supplier selection, and aid in decision-making that can help e-commerce companies optimize costs and revenue. To address the challenge of delayed deliveries due to errors in addresses, machine learning techniques can be exploited to validate customers’ addresses, compute address quality scores, correct city-pin code mismatches, and provide suggestions to users on how to correct wrong addresses.
Create a superior delivery experience
A superior delivery experience for customers boils down to two key requirements: the quality of the packaging and the speed of delivery. While the quality of the packaging inherently depends on the materials used and the excellence of the processes in place, there is a lot that can be done to improve the speed of delivery.
At a time when deliveries are being made through an unmanned aerial vehicle, e-commerce companies must enhance their transportation network including rail, road, ship, and air networks to increase efficiency in the transportation network. For instance, transporting a product from Delhi for a customer in Hyderabad will be fastest if companies use a cargo plane service, rather than road or rail. The speed of delivery will compel the customer to reach out to you for their next requirement.
Similarly, establishing regional fulfilment centres or warehouses will aid in faster delivery to tier 2 and tier 3 cities. In addition to speedy delivery, it provides a larger variety of products for more towns and also provides the convenience of ordering everything desired by the customer on one platform. Another option for reaching out to remote cities is to collaborate with local kirana stores to provide dependable and convenient deliveries in the area.
Finally, the backbone of serving customers in today’s day and age would be to leverage technology and resources to enable the most efficient placement of inventory within the fulfilment network. The closer we can place the inventory to the customer, the faster the delivery and the lower the costs.
Decarbonizing the transportation network
According to forecast by Council on Energy, Environment, and Water (CEEW), the demand of freight services is projected to increase five-fold from almost 2,000 billion tonne-kilometres (tkm) in 2020 to more than 10,000 billion tkm by 2050. This growth is driven by national and global economic growth, rising e-commerce shipments, and the increasing need for transportation of goods and commodities. To mitigate environmental impact without compromising the economic growth, it is important to transition towards a zero-emission delivery fleet.
One way to achieve this is by adopting electric vehicles, which produce zero tailpipe emissions, reducing greenhouse gas emissions and improving air quality. We have seen that while the upfront cost of electric vehicles may be higher than conventional petrol or diesel vehicles, the running cost due to lower maintenance and fuel costs can be a great incentive in the longer run.
Then comes the charging infrastructure which is essential to making a meaningful transition from internal-combustion engines to electric vehicles. It requires working together with charging infrastructure providers and governments to set up reliable and convenient charging stations that can be established on delivery routes. Collaboration and partnerships are also key to decarbonizing the transportation network. For example, by joining forces with like-minded organisations such as Mahindra Electric, Tata Motors, TVS Motors, Sun Mobility, and Magenta Mobility, we are on track to deploy 10,000 electric vehicles in our delivery fleet by 2025.
We have been exploring more such partnerships to decarbonize our fleet while ensuring the safe deliveries of customer orders. There isn’t an off-the-shelf solution to this complex problem, but only by testing and experimenting with different solutions, we can learn from our failures and successes, and identify areas that need more research and development and conversely those that can be scaled up significantly.
The road ahead
In a world where the number of e-commerce deliveries continues to grow, consumer expectations are rising alongside them. The future of delivery is intermodal transportation, where e-commerce companies use a combination of two or more different transportation modes, such as trucks, trains, ships, and aircraft, to move freight to a final destination. This will be the most efficient and cost-effective solution to provide efficient deliveries to customers.
Creating a safe, efficient, and sustainable way to connect inventory, orders, and customers will soon become a key focus area. For e-commerce companies, quality, speed, integration, and keeping up with technology are necessary to keep all stakeholders in the value chain satisfied. It will be a crucial factor in determining the number of customers they onboard and their retention on the platform.
To provide an unforgettable, superior delivery experience, businesses need to focus on getting the basics around the first, middle, and last mile right if they want to stand out in the highly competitive market.
This article by Abhinav Singh, Director (Customer Fulfilment, Supply Chain and Amazon Transportation Services), Amazon India originally appeared in the March 2023 of Logistics Insider magazine. All views expressed in the article are his own and do not represent those of any entity he was, is or will be associated with.
