Article by: Asst.Prof. Suwan Juntiwasarakij, Ph.D., MEGA Tech Senior Editor
Since the first official e-commerce transaction occurred on August 12, 1994, e-commerce sales have grown as a percentage of total retail sales. The global e-commerce market for all goods surpassed $2 trillion in 2017 and is expected to nearly double by 2021, according to Statista. In Thailand, for example, the online shopping sector is valued at $26.2 billion. On average, shoppers who participating in online shopping are spending $1,746.20 a year.
Globally, to keep up with such growth in online shopping demand, retails are facing delivery dilemma, strictly speaking, the last-mile delivery, since deliveries in the last-mile portion of the trip with cost-effectiveness has been a critical challenge for e-commerce vendors since e-commerce began. According to J.P. Morgan, these figures make Thai online shoppers rank the top online spenders comparing with those in South East Asian countries.
The global last-mile delivery market was valued at USD 1 billion in 2018 and is expected to reach USD 7.69 billion by 2027 with a CAGR growth rate of 16.7% in the forecast period from 2019 to 2026. The last-mile delivery market globally segmented by application into commercial, industrial, warehouse, and other. Geographically, the last-mile delivery market is divided into five regions, including North America, Europe, Asia-Pacific, and the Middle East & Africa, and South America.
Last-mile delivery market in the Asian Pacific is expected to grow from USD500.3 million in 2018 to USD2,292.6 million by the year 2027 with a CAGR of 19.0% from the year 2019 to 2027. The Asia Pacific last-mile delivery market is growing along with the automotive and transportation industry, but the market is likely to slow down its growth due to the shortage of skilled professionals
Asia Pacific, according to BusinessWire, is anticipated to growth with the highest CAGR during the forecast period, due to the presence of a large number of logistics providers and intense competition owing to the rising demand for outsourced services. This growth attracted several non-asset-based entrants and encouraged exiting players to expand to high market share, Asia Pacific contributes in the las-mile delivery market, followed by North American and Europe.
Projected market size of the autonomous last-mile delivery worldwide from 2019-2030 (billion US dollars)
As package volume has grown, carriers have been dealing with the increased number of deliveries and stops, the variety of packaging in size and shape, and the physical access on the delivery routes. Drawn from developing case studies world-wide, here are some of the initiatives to innovate last-mile deliveries
AUTONOMOUS TRUCKs. Self-driving long-haul heavy-duty trucks, last-mile delivery vans and other commercial delivery trucks are being tested throughout the world. In many instances on public roadways. The economic benefits of self-driving trucks are numerous, including the cost saving of phasing out truck drivers, and the ability for trucks to operate 24 hours a day since there would not be driver restricted hours issues to content with.
AUTONOMOUS CARS. Nuro, an autonomous vehicle startup focused on the last-mile delivery of local goods and services, has teamed with Kroger to delivery groceries using autonomous vehicle in two pilot grocery delivery programs: the first ran from August 2018 to March 2019 operating out of one store in Scottdale, AZ. The other began in March 2019 and serves two stores in Houston, TX. At $5.95 per delivery service, customers place delivery orders using Kroger’s online system and Nuro’s app and are advised when the batter-powered vehicle shows up at their residence.
ROBOT DELIVERIES. Another autonomous vehicle making last-mile deliveries are self-driving robots that travel only on sidewalks and crosswalks and can carry orders as heavy as 50 pounds for as far as 30 miles. They travel slow speeds using global positioning system and 360-degree camera sensors to allow autonomous navigation. They need to be supervised by human, still.
Cities have been struggling with how to regulate this new kind of vehicle creating confusion and congestion on sidewalks. San Francisco severely restricted the machines at the end of 2017, requiring permits and mandating that startups test their delivery robots in quieter, more industrial neighborhoods.
DRONEs. Delivery by drones are being used in limited environments and fore selective delivery types in a few countries including the UK, France, Japan, and China. Their use for delivering relief and medical supplies to remote or difficult to reach area is growing. Hotels are experimenting with drown delivery of food and beverages to guests. In addition, its widespread use for other types of deliveries has been delayed by additional test, development of regulations, and for shippers to resolve several logistical challenges. The cost saving to shippers, and the benefits to commerce, as well as, reduced trucked traffic and corresponding fuel consumption and emissions, would be enormous if drones replaced many deliveries completed by more conventional means.
CARGO BIKES. Portlanders are familiar with cargo bikes though the common appearance of B-Line, Portland Pedal Power, Soup Cycle, and other delivery companies. Most cargo bike are electrically powered, or electric power assisted, and some can carry up to 750 pounds. They are ideal substitute for many deliveries by van, particularly since they done’ require much parking area. In addition, they can be loaded and unloaded in lesser time, and can move more quickly in congested urban areas that have by cycle route network. They also don’t require as much roadway capacity as trucks and are an important means of delivering goods when roadways are unavailable during emergencies or other incidents. In 2016, UPS began operating its electrically assisted e-bike tricycle in Port land, and in early 2019, UPS has stated a licensed pilot program for e-bile operations on sidewalks and bicycle lanes in the downtown Seattle area including the Pike Place Market.
TAKE-HOME MESSAGE
Difficulties of merchandise delivery in a cost-effective way on the last mile of the retail sales chain has bedeviled e-commerce from its beginnings. Hazards in the last mile killed off many of the internet startups in the late 1990s and early 2000s. Despite the growth and evolution of e-commerce since then, along with the advent of smartphones, apps, and improved connectivity, the fundamental economics of the last mile haven’t changed.