What if delivery providers all worked together? | Zedify
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Whatifdeliveryprovidersallworkedtogether?

calendarOctober 22nd, 2024
personBex Young
clock10 minute read

What could the future of deliveries look like if we all worked together?

In his recent talk at Leaders in Logistics,  Marcus Hurd, Zedify COO, explored the future of sustainable urban delivery. 

He set out Zedify’s vision for a collaborative approach to driving innovation in last-mile logistics, underscoring the need for brands to meet consumers’ growing demand for fast, efficient, and environmentally responsible deliveries.

Marcus explained the importance of Zedify’s microhub model and cargo bike network, which drastically reduce emissions in the last mile, but he also spoke passionately about how sustainability is about more than just carbon. Zedify’s model is about fair wages for delivery workers and about creating cities with less congestion, less noise, cities that are safer and healthier and better for everyone inhabiting them. Relying solely on electric vans won’t solve urban pollution and congestion, instead we must use the smarter, more efficient vehicles and infrastructure on offer. 

So what does the future hold?

Marcus shared some exciting ideas about how more collaboration between businesses in the final mile space is going to be key to meeting the needs of retailers and their consumers, and has detailed his insights for us here.

What if we aggregated parcels at lockers?

With locker parcel aggregation, occupancy could be improved – provided there is collaboration and cooperation in the final mile.

The big problem that is facing the industry today is that lockers tend to be too full for too long, because it’s difficult for carriers to plan to collect those parcels as part of their daily delivery routes. It also means that, on occasion, the carriers are wanting to aggregate and collect from those lockers less frequently, so they collect larger loads. That’s bad for the consumers that want to use the lockers, it’s bad for the locker companies and it doesn’t produce a very efficient collection profile. We’d like to look, in the future, at scenarios where we specialise in key parts of a journey. 

There’s no reason why cargo bikes cannot support the aggregation of parcels, customers’ parcels, from lockers to our micro-hub locations, allowing carriers to come into single locations and pick up larger pallets aggregated on the same number of days but increasing chain in the lockers. This would be a low price service, but it would equally open up a lot of opportunity for consumers to have better local service and more choice, the locker companies to have lower occupancy levels and higher locker churn which is really important for them and for the carriers to have a more efficient collection profile with plenty of margin and scale in the game for all. 

Ecommerce merchant aggregation: a variation on a theme

Ecommerce merchant aggregation would be a similar story to locker aggregation, but would focus on those merchants that are shipping below the carrier engagement threshold.

Any small merchant reading this will know that there is a threshold from which most carrier rates cards are applicable for collection from your stores. That number is consistently increasing. Why? Because carriers want to have smaller, more simplistic networks with fewer collection points and fewer waypoints and therefore greater efficiency. The challenge with this, however, is it’s a landscape devoid of competition. 

At Zedify, we have a dream that everybody, and in particularly artisans in our vibrant centres, have the opportunity to compete in the national market, same as every other retailer. We don’t want to see a landscape that’s just full of ‘insert brand name as you wish’. We want to see local businesses having the opportunity to thrive. 

One of the ways we can see a route to this happening is a sustainable carrier, such as Zedify, completing the very first micro mile of a parcel, and aggregating for ecommerce vendors to our microhubs. This would then allow for particular carriers to collect larger fuller pallets, and therefore give access to those clients to a better more competitive rate card. It can be the difference in several pounds per next day delivery, and also unlock a lot more parcels for the larger parcel markets who are missing those parcels today because they aren’t hitting the aggregation threshold. 

We’re back to the C word: final mile collaboration

Final mile collaboration, working in harmony – that’s what we hope for in the future.

There’s a great example of us doing this really well in Bristol and in Edinburgh today with Evri, for example. Primarily in Bristol, we’re delivering in excess of a thousand parcels a day across the Clean Air Zone for Evri. We’re doing so as a white label extension of their business. We are totally cool with that and very agnostic about how we work when it’s making an impact in disruption – it allows us to deliver the final mile of the parcel for every to do some effectively at a rate that is competitive; that allows Evri to make a narrow margin, and Zedify to make a narrow margin, whilst taking vans physically off the streets of Bristol and replacing them with cargo bikes. 

This service shot up in popularity, moving up from five bikes a day on the road to in excess of 11 as we sit today, and it’s likely to increase further as demand increases – so watch this space. 

Let’s make returns great again

It’s time to make returns faster. On average, a return that’s back in a retailer’s network takes between 24 and 48 hours to process and get back to the pick face. Any of you reading in big retail know that the speed of getting a parcel back to the pick face quickly is the difference between marking it down 5% or much more, and what we’re learning recently is that return times are protracting.

Some of the issue is a locker problem, but primarily it’s not a very attractive proposition – returns are costly for everyone. We saw the statistic that says people still shop online to have a delivery to home, which in most instances means that they prefer to have a return initiated from home as well. 

However, the reality is that retailers don’t often give that choice because it’s not cost effective for them, and it’s not to be fast. The issue there is in a returns policy giving, for example, 30 days to return. The reality of that results in a very protracted returns journey for most parcels. 

So – here’s what we think we could do. We have cargo bikes operating in most of the big cities and these are passing most residential addresses with a pretty high level of frequency. Imagine a world where we could collaborate and integrate more vertically and seamlessly. Zedify could drop off a parcel and collect another parcel that needs to be injected back into another network, taking days out of the parcel journey for a very modest parcel fee. The value to the retailer – when you aggregate that – could be millions of pounds a quarter just by exaggerating the speed of the product back to the pick face. And more importantly, why are we talking about it?

Sustainability. Returns and returning items being marked down or ultimately ending up in landfill is a horrific thing. So the more we can speed up returns, the more we can take excess product out of markets, the more we can get towards a world where we forecast product better, the better we forecast product, the less of it we produce, the less of it we produce, the less damage we have, the less waste we have, the less concern for these things we should have. 

 Building on the concept: deliver and return

A big question that consumers have is: “I’ve returned my parcel. How long will it take me to get my refund?” With current solutions, this could be 7 to 14 days. These kind of propositions that we’re suggesting could be 24 hours.

It could be even less depending on the agreement with the retailer; we could scan something on the doorstep, take a parcel to our hub, and it could be off within 12 hours. The quicker you put the money back in the consumer’s account, the more likely they are to spend it with your brand again. Equally, the less likely you are to mark down the product they’ve returned. 

We can go and do some deliveries, and come back and pick up that fashion parcel that’s got the last three items of a particularly high-selling range in its bag for somebody in three assorted sizes. We can get those back to the pick face within 24 hours. We can attest to the fact that the right parcel’s been returned on the doorstep and speed up the refund to customer. 

This feels like a win-win, it feels like we can do better, and it feels like a way of taking more vehicles out of urban centres and replacing them with people working innovatively, cooperatively and collaboratively to do the right thing.

PUDO to home

Finally – PUDO to home. We know that retailers’ most efficient transport journeys tend to be those where they replenish their high street stores and also deliver their click and collect at the same time.

Anyone wondering why over the last few years you’ve seen some of the big department store retailers changing their click and collect propositions, with those dates become slightly longer than you’re used to? The reality is that it’s not a great consumer proposition anymore. It’s slightly better than waiting five to seven days for the standard delivery offered free. If you want something slightly quicker, your quicker service is not generally particularly cost effective, nor particularly sustainable.

But – imagine the retailer wants to utilize the traffic that’s already going into their stores and convert some of those PUDO deliveries into great, fast final mile experiences for their customers. We would have a lot of appetite for having those conversations and equally for fueling returns back into those click and collect locations, re-aggregation into the networks. 

In short: let’s make the logistics world smaller

We should be making the world smaller with what we can do in logistics, making it more interesting and making it more sustainable and thinking in innovative ways.

Flexing and reducing the prevalence of our brand logos at every activity we do, and increasing an attitude of – ‘how can we do this better and who do we need to work with to do so?” – will inevitably have an impact on the number of vehicles that operate in spaces and the number of services that are available to the consumers. Most importantly, the delight on consumers’ faces when they see outside their door a slightly less congested world with a slightly less smoggy hue and slightly more bikes doing slightly more interesting things… has surely got to be priceless?

Written in conversation with Marcus Hurd, Zedify COO

 

Thanks for your interest in using Zedify. At the moment, we‘re just for businesses and can’t deliver one-off parcels for individuals. Sorry about that.

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