As e-commerce and the Internet continue to influence the buying and selling of products and services, so too will they heighten expectations for ‘just-in-time’ delivery.
Consumers’ expectations around transport and delivery are rising. Deloitte asked consumers (in both B2B and B2C environments) what they thought ‘fast shipping’ meant; with most respondents saying it means they get their hands on the goods they want ‘within two days’.
Only a year prior to this, these consumers said ‘fast shipping’ meant ‘within three or four days.’ But, “Even as customers’ expectations have increased, their willingness to pay for fast shipping has fallen, with 64% unwilling to pay anything extra for two-day delivery,” Deloitte notes.
Related: Managing costs without affecting customer relationships
Much like car-sharing and ride-sharing has disrupted traditional modes of personal transport, similar sharing of commercial vehicles could prompt a re-thinking of how road freight movers operate.
Why this urgency for delivery?
Rising demand for faster delivery ties in with consumers’ growing need to be gratified as quickly as possible. These new demands come in the midst of a sustained shift toward online shopping.
“Increased Internet access and better tools for online shopping have been driving a growing volume of shipments and the proliferation of possible delivery locations for companies engaged in delivering goods,” Deloitte says.
Associates in charge of logistics studies explain that theDeloitte Holiday Surveyfound, for the first time, that customers planned to spend just as much online as in stores last year. And, as more sales move from brick-and-mortar to online, the demands on transport networks will shift further.
“Where a single truck once moved a large load from a distribution centre to a single retail location, the same volume of goods may now travel the last mile on many trucks, each of which may be less than full, with less predictable routes to stores and homes.” – Deloitte
Deloitte says businesses are beginning to ask for similar value creation in B2B logistics transactions. “One survey in Canada already shows that nearly half of all businesses receive ‘a less-than-full’ truckload freight, and they are now asking for specialised or expedited smaller deliveries to meet their operational needs,” the firm reports.
Related: Why and how to become an efficient truck fleet manager
How companies can respond to changing logistics requirements
Growing expectation for faster and cheaper shipping is leading to the rise of a ‘crowd logistics’ marketplace. In this arena, the sharing of transport and logistics assets could support transporters in achieving more – by leveraging their own freight associates’ capacities.
For instance, by leveraging an adjacent network, a regional transporter could use another transporter’s trucks and trailers to deliver outside his or her usual routes. “Regional parcel carriers already collaborate with each other, but technology platforms could help reduce co-ordination costs and broaden collaboration between long-haul transport companies,” Deloitte says.
Imagine if a retail customer you service is not able to fulfil customer requirements for faster delivery. The retailer’s business is likely to become unsustainable. Research shows that crowd sourced logistics businesses are helping companies service a growing demand for deliveries.
ParcelBright and Veeqo in the UK and DoorDash in the USA are examples of a few companies that are pioneering an urban delivery model through crowdsourced vehicles and warehousing.
Rising costs necessitate a change in operations
Through crowdsourced logistics platforms, revised business models, greater collaboration between established transporters and start-ups, and the tightening grip of digital – consumers both B2C and B2B will increasingly expect faster, cheaper deliveries.
Related: Advancing logistics is key to Africa’s growth
In South Africa, transporters will face increased pressure on their margins as government adds on a further 52 cents a litre to bolster its General Fuel and Road Accident Fund from this month – making up a total increase of 11% on the current levies from R4,78 to R5,30.
The fuel levy increase came into effect on 1 April, along with other key business-influencing tax increases, such as a hike in the general value-added-tax (VAT) rate from 14% to 15%.
Keep costs in check. Instead of buying new vans, bakkies, trucks or trailers for your transport business, why not talk to us about tailored vehicle and asset lease solutions?