Missing drivers, missing service employees and therefore significantly missing capacities endanger current business models, service to customers and well-running processes.
Increasingly, we as CAMELOT see ourselves assisting companies to overcome these hurdles by enhancing the current usage of given resources. Demand-Driven-IT solutions as well as identification and elimination of wasteful processes are ways to close the gap. Another one is to reconsider traditional ways of distributing goods. Therefore, in this blog post we like to look into recent market developments which are part of our work with our clients to drive their future setup/ distribution.
Micro hubs in urban areas – Foundation of growth
Door-for-door delivery attempts in cities can take averagely 30% of the whole transportation costs and binding assets and people which might be needed elsewhere. This creates a bottleneck for further growth taking into consideration the “stressed” transport capacity availability. The concept of a micro- or city-hub describes the existence of a small storage facility within a city. It does not necessarily have to be a building but can be a smaller unit as a swap body or container. A convenient fact is that e.g. swap bodies can be placed on tactically determined positions within a city to avoid restrictive access for heavy trucks at a specific time or due to emissions. These positions can vary according to demand and highest customer centricity for the respective day. Right after finishing the sorting process for e.g. parcels the swap body can be brought to his specific location from which shipments can be delivered to the consumer. Every day a new optimized location is possible.
Some inner cities face the issue of growing vacancy rates – you can use this to your advantage! Camelot uses network design and tactical route planning approaches in order to identify suitable locations for micro hubs. Vacant retail areas can be such a suitable location.
The concept of micro hubs is also beneficial for campuses, industrial parks (e.g. chemistry, automotive), hospitals and business parks because we often see similar city-like structures. Tactically well-chosen locations can have positive effects on decreased distances to recipients and enhanced customer centricity as service.
The actual last mile distribution can be supported by new transportation concepts like drones, robots and cargo-bikes.
New transportation concepts – Mobility and Uber Freight
Drones, robots, cargo-bikes and new freight platforms allow new approaches of delivering goods. New freight platforms are e.g. Uber Freight and Saloodo! on which shipping requests can be inserted and matched with a private (Uber Freight) or professional (Saloodo!) carrier. The next step in realizing new transportation concepts is autonomous transport operation of e.g. drones and robots.
Drones, for example, can operate autonomously from a micro hub and deliver items within a small radius in a few minutes. Storage capacities can be outsourced to these micro hubs and e.g. transformed to a consignment warehouse. Especially consignment warehouses are suitable for vacant commercial spaces as they normally build upon a contract for a specific customer.
Further, open freight platforms, e.g. an Uber Freight app, allow an uberization of freight transportation which can operate with the micro hub as a base. Uberization emerged from the concept of crowd-based services which also can be seen as a loose network of last mile operational subcontractors. Services which are provided by non-professionals but are standardized and transparent to ensure deliver quality and service level. We observe this development closely as it may reveal further options to develop counter movements to the intensifying lack of human resources in logistics. However, an uberization in logistics does already exist and enlarges the pool of transportation options, e.g. in the US for the private moving sector. At this time, we do not see that the traditional business of professional freight forwarders is endangered or should expect significant change from “uberization” yet.
Who can assist to identify your potential?
The selection of the best solution – that should fulfill compliance requirements, offer the most synergies and enable you to sustainably develop your business – is difficult and distracts you from your core activities. CAMELOT Management Consultants provide decades of experience in logistics and supply chain management, deep knowledge across many industries, IT solutions and highly adaptive methods.