The magical last mile in logistics
If you consider the flow of goods that are on the move in Germany by land, air and water every day as a logistical cardiovascular system, the so-called “last mile”, which is so diverse, is related to the main traffic arteries, like the capillaries to our large arteries. What can be brought relatively easily from one large region to another via warehouses and large-scale means of transport becomes a logistical challenge when it comes to delivering to the end user. Not only does the last mile generate a large proportion of greenhouse gas emissions, it also causes the greatest costs in the supply chain. The environmentally friendly and socially responsible design of the last mile is the holy grail of logistics. Because the problem is too complex for a “one-size-fits-all solution” to be the answer.
Quick Commerce – Innovation of the Future?
Fast delivery of groceries to the front door is at the top of the list of innovations that came too early. The company WebVan, which started in 1999 with funding of $ 1.2 billion and the aim of delivering groceries ordered online the following day within a 30-minute time window, unfortunately came to an end in 2001. Consumers were simply not ready for the business model. Today’s heirs to this idea encounter a completely different reality and consumer behavior that has been changed by a global pandemic.
Grocery deliveries have been struggling to gain a foothold for some time in the form of offers from large retail chains or special niche offers from local producers. Meanwhile, the quick commerce boom with deliveries within 10 minutes surpasses anything that has come before. If you take a neutral look at the situation beyond the hype, these companies currently only exist through huge sums of risk capital. A lot of money is burned in branding, regardless of losses, and employees are employed under questionable conditions. With the current business model, operating profits are unlikely for years to come.
In conclusion, quick commerce is an interesting development. Even if the consistent use of e-bikes and the micro-bearings cannot be criticized for the ecological balance. Typically, however, for new platform services, providers first try to create their market through artificially low prices. If you look at models like Uber in the USA, it is clear that prices will rise sooner or later. The only question is whether the supermarket will still exist by then or whether it will have significantly lost market share.
Last mile in logistics in the city
The interesting thing about Quick Commerce is that already existing solutions for the last mile in logistics combine into an innovative overall concept. Even if microdepots or bicycle competitions on e-bikes are nothing new in and of themselves. So you can definitely get inspiration from this approach. More fairly paid jobs would be a big and feasible step forward for the last mile in logistics. They ensure that goods reach the front door in an environmentally friendly manner from the micro-warehouses spread across the city. But here too, not all of the challenges have been solved by a long way.
The potential locations for microdepots in the best inner-city locations are highly competitive. In addition, previous attempts with micro-bearings have been heavily subsidized by the public. It is not yet clear whether the corona pandemic and a possible restructuring of the real estate market, through a reduction in office space or the withdrawal of classic retailers, could change this in the medium term. Parcel stations are even more promising and already very established. If an agreement between the different providers on a common system were achieved, there would be even more potential here.