The Future of Last-Mile Service: Post COVID-19

Learn to adapt

The context of the global pandemic due to COVID-19 has forced many behaviors and trends in society to change. It has made us rethink our priorities and values, modify our way of buying and what to buy.

In the case of transport, restrictions on mobility and social confinement measures and restrictions have led to the reformulation of the purchasing, distribution and delivery processes. In addition, transport agencies have had to adapt to new consumer trends of customers and their demands and expectations with the purchase made.

What has happened with the COVID-19 pandemic?

In general terms, it can be said that, during the first months of the pandemic, sales made through online channels and e-commerce platforms increased exponentially. This is mainly due to the mandatory closure of retail stores and commercial spaces. All these commercial areas were forced to rethink their sales channels and promote online or telephone sales to continue with their business and continue offering their services to customers.

In the case of household appliances, we find a consumer good essential for people's lives. Demand was not affected during the health crisis, although access to the surfaces to buy them was difficult for several reasons. The key is therefore in how the transport agencies guaranteed the arrival of the electrical appliances to our clients during the period of confinement.

Mobility was reduced to inconceivable levels before the start of the pandemic, this being a key point in the development of last-mile transport in times of COVID-19. The transport agencies were able to take on large volumes of orders to be distributed because there was no urban or interurban traffic. This improved transport and delivery times and also facilitated more efficient and faster stops for loading and unloading and final reception by the customer. The reduction in traffic and urban congestion and the efficiency in the loading, unloading and installation processes had a very positive impact on a good home appliance shopping experience for the consumer.

The actual situation

Currently, with the progressive return to normality, cities are filling up with cars again and interurban traffic increases. This raises several issues that question the sustainability of the return to normalcy in terms of both efficiency and environmental issues.

The focus is now on some solutions that can help transport agencies and logistics operators establish practices that improve last-mile transport in a post-pandemic context.

Solutions and policies: BCG in the face of these measures

Large cities such as Barcelona or Madrid are already implementing policies to limit the entry of passenger cars into central areas for reasons of reducing CO2 emissions and other polluting gases. Traffic within cities is also being limited to make it easier for freight vehicles to go faster in their deliveries and be more efficient with their resources. The root idea is to reduce the number of private cars to be able to leave space for commercial vehicles and freight vehicles.

Along the same lines, experts also propose the implementation of management platforms for parking spaces dedicated to loading and unloading with the aim of improving mobility in cities. Their studies suggest that, in some time slots, the demand for loading and unloading places may be higher than the available supply. The excess demand for these loading and unloading spaces means that freight transport and delivery vehicles must look for alternatives to stop, such as double parking or continuing to circle until a parking space is freed.

In our case, the alternative of parking further away and walking to the destination is not feasible, since the electrical appliances are usually heavy and difficult to handle. In addition, the fact that our order delivery service also involves the installation of the order means that our workers must park the vehicle in the appropriate places to be able to carry out their work with guarantees and safety. A lack of specialized parking spaces for loading and unloading means more time the customer has to wait to receive their package and, in the long run, means fewer deliveries and daily installations for our transport teams.

The management platforms of the loading and unloading parking spaces would allow parking to be reserved in advance. This encourages planning of the logistics service at the same time that it could discourage some transport companies from delivering only at peak times.

Other strategies such as the construction and enhancement of a network of delivery and collection points or the construction of urban warehouses would not be applicable in the case of last-mile transportation of electrical appliances. Well, for the transport agencies of the white mile, the dimensions of the warehouses required are not possible within the big cities. The option of the delivery and collection points of the package is also not feasible since the meaning of what we understand as last-mile transport that includes the delivery and installation of the product is lost.

Mentality change

The health crisis caused by COVID-19 has highlighted the existence of other ways of understanding the transport of household appliances and logistics in general. We have been working in inconceivable conditions for only a few months and this has led to an improvement in deliveries and logistics services.

It is the responsibility of all the agents involved in the processes of transport, logistics and installation of electrical appliances and other goods to be able to ensure an easier and more efficient future.

In short: what to do

In conclusion, appliance transport agencies must propose last-mile logistics that is effective, optimal, sustainable and customer-focused.

As we have seen, when we refer to the last white line logistics mile, we are talking about the last kilometers that an appliance travels before reaching the final consumer's home. For us at BCG, this last-mile service also includes the installation and commissioning of the appliance upon delivery.

The keys to understanding last-mile logistics are centered around concepts such as time and transportation and installation costs. They also revolve around the role of different agents that intervene in the process, such as transport agency workers or the final consumer. Other issues such as urban and interurban traffic, loading and unloading parking spaces or environmental issues are also key to understanding the importance of last-mile logistics today.

It is for all this that, at BCG, we believe in a good understanding of the last logistics mile as a transport service in the Peninsula and the Balearic Islands. We want to continue being experts in the last logistics mile of our future.