We're working on the future of drone delivery

The Last Mile issue is enormous and complex. Rising e-commerce demand, urban density and energy costs are all conspiring to make this an important issue for everyone. I believe that entrepreneurial ingenuity and some basic technology enablers will go a long way to solving this problem for us.

Fundamentally, the objective function of the delivery of goods from business to business and business to consumer is one of optimising for cost, energy use, speed and convenience. It must also adapt dynamically and deal with an endless variety of goods, routes and destinations. The last mile refers to the final step in the delivery of an e-commerce order to the end consumer, and is characterized by a tremendous drop in efficiency since each order typically goes to a discrete address. Increasingly, the focus is on the last 100 meters of delivery as orders must navigate obstacles unique to urban settings such as traffic, parking, loading docks, security desks and high-rise buildings. Additional impediments like federal, state and city regulations also hinder the deployment of a number of promising ‘digital’ solutions.

Despite the magnitude and complexity of the problem, a number of fundamental technology developments are enabling a wide range of innovative solutions that, when considered collectively, provide hope that enterprise and ingenuity will solve this problem. Here are seven technologies that are enabling last mile and last 100 meter delivery transformation:

  • Autonomous navigation: offers potential to reduce labour and help manage urban traffic density
  • Cloud connectivity, IIoT and wireless: facilitates real-time tracking, condition monitoring and mobile communication between parties
  • Battery technology and vehicle electrification: two words: e-bikes, emissions
  • Robotics and drones: offers potential to offset labour scarcity, speed delivery, reduce traffic and improve rural delivery
  • Smart-city infrastructure: city-to-vehicle communications and autonomous vehicles can improve traffic, routing, parking, data collection and communications
  • Machine learning, AI and data analytics: with rich contextual data, artificial intelligences can improve route planning, resource allocation, scheduling, condition monitoring and dynamic responses to adverse events
  • The gig economy: human dexterity and problem solving abilities will remain vital components of fulfillment and growth of the gig economy is driving greater utilization of existing vehicles, infrastructure and storage facilities.

Now let’s see how these are being combined and harnessed to develop diverse supply of entrepreneurial and innovative broad-spectrum and sometimes niche solutions to the last mile and last 100 meter conundrum.

Vehicles

Today, last mile orders are delivered by van, car or a human on foot or bike. Going forward, vehicles will be customized to eliminate drivers, leverage sidewalks and other through-ways and minimize traffic delays. They will integrate with smart-city infrastructure for efficient route planning and they will be electric:

  • Nuro, Inc. offers an autonomous and electric solution for range and Starship offers a similar solution for dense urban applications
  • FedEx, UPS and USPS are all evaluating autonomous vehicles but with a human to provide the package handling so this represents a partial solution
  • Flirtey, MatterNet and Cambridge Consultants’ own DelivAir are developing drone-based delivery solutions which offer both speed and delivery to a person, regardless of location, rather than a fixed address
  • DHL is expanding use of its Cubicycle hybrid delivery bicycle system to reduce emissions and improve urban delivery times. Despite this, eBikes and trailers as delivery platforms, have met resistance from urban planners and have yet to find wide adoption in North America
  • There is a revival of the classic bike messenger in the form of Postmates, thanks to the gig economy and the rise of food delivery services like GrubHub, and it is worth pointing out that a human on a bike is fast, cheap and, most importantly can more effectively negotiate stairs, curbs, security desks and the myriad variations and complexities of the urban landscape and this delivery mode should not be underestimated. Postmates charges between $5 and $8 per delivery and Starship claims it will be similarly priced

Services

For every type of e-commerce product, there seems to be a unique last mile solution. Here is a selection of innovative services that address specific needs:

  • Lockers: driven by same-day and same-hour delivery demands and enabled by IIoT and wireless connectivity, lockers are low-cost and localized solutions that de-couple delivery and end-user collection; saving time and optimizing for speed and convenience. Fulfillment lockers can be located at the retailer, like Home Depot for ‘fly-by’ collection, or at end points like large urban apartment complexes and universities. Amazon now offers its Amazon Key service, allowing non-perishable items to be delivered to the trunk of your car.
  • Grocery delivery is now mainstream, often leveraging gig economy labour for delivery, providing its own delivery infrastructure like PeaPod, or offering ‘fly-by’ pickup at the grocery store. National grocery and pharmacy chains are all providing some sort of service through partnerships with firms like Ocado, Instacart and Shipt. Adoption of e-grocery services in the United States is anticipated to grow this year by 23% to $17.7B. With myriad service offerings, remaining last mile issues are more focused on matters relating to consumer confidence and delivery timing
  • Logistics: DarkStore is establishing a novel solution to retail's last mile. As brick and mortar retail adapts to changing buying habits, many chains and brands are opting for small ‘brand ambassador’ kiosks in prominent but pricey locales. To meet same-day delivery expectations without the need for otherwise expensive inventory space, DarkStore allows retailers to partner with nearby businesses which have un-used space to act as virtual storage/fulfillment centres. Doorman slows things down a bit by re-directing your e-commerce order to its facilities, notifies you of its receipt and then schedules a precise delivery time, that day, to your selected location, and Routific offers route optimisation as a service for anyone in the last mile ecosystem.

Newton’s third law of motion provides that for every action, there will be an equal but opposite reaction. With a rich foundation of emerging technologies, entrepreneurs are reacting creatively to every commercially significant demand offered up by the last mile, supporting the promise that the problem may indeed solve itself.

 

 

 

 

Author
Bruce Ackman
Industry & Energy Commercial Lead

Bruce joined our Boston office in December 2016, having previously held business development positions with Manta Product Development and Sagentia. During his wide-ranging career, Bruce has advanced the commercial development of early-stage technologies and service in the life sciences, consumer product and innovation sectors. Bruce holds an undergraduate degree in Biochemistry from McGill University in Montreal, QC and a Masters in Business Administration from Queen’s University in Kingston, ON.