If evidence were needed that the delivery industry is under intense pressure to reduce costs to survive, there’s a truckload of it this week in the national news. Hermes is being investigated by HMRC following accusations of paying self-employed delivery drivers below the minimum wage. Meanwhile industrial action this week by the Communication Workers Union across Post Offices could also an impact on parcel shipments, particularly customer returns. Post Offices face such tough competition these days, and cuts to jobs and pensions inevitably fire up the unions. None of this is good news for retailers aiming to keep customers happy and reassured with slick delivery and returns operations.
Fast forward 20 years, and the ‘employee voice’ might not be such a headache. If Amazon has its way drones will have largely replaced the need for vans and drivers – with Philippe Hémard, Vice President for Amazon Logistics Europe certain that traffic will put paid to delivery vans anyway – read our article here. Speaking at the Deliver One conference in Luxembourg last week Hémard advocated drones and was very clear that Amazon would be ploughing investment into this technology and working with aviation authorities to make it work. He didn’t actually say it, but clearly there’s a big benefit with autonomous deliveries – drones (and robots in DCs) can’t complain about pay and benefits, and won’t niggle about hours and conditions and hold up ambitions to speed up parcel deliveries and beat the competition.
Keith Cornell, Starship Technologies’ Chief Commercial Officer also spoke at the Deliver One conference talking delegates through the ‘Starship Math’. The company has calculated the potential cost savings of using robots for delivery. He says that on demand delivery currently costs $6 to $12, while the efficiency of robots completing the last mile brings that figure down to just $2 to $3. Manpower is vastly reduced, fuel bills cut and the cost of failed deliveries all but eliminated, he argued.
Sharing the stage, Drone Evangelist from Copter Express Andrew Sholokhavich, talked up the benefits of drone usage in delivery, focusing on how they will cut down on the need for people in the coming years. “Today we have developed a drone that can be operated by one guy. By 2017 he can operate 12 drones,” said Sholokhavich.
In the future fewer people will be needed to operate the robots. And of course the robots are infinitely easier to manage than humans – in the HR sense. There’s a definite trend here which will be fascinating to watch. Drones and robots might be low cost, efficient, and unlikely to unionise, but how do they fit with the brand and customer service strategy? Do customers want the robots to take over in the first place?
European view from Luxembourg
Last week at the Deliver One conference a delegation of international ecommerce and e-delivery executives debated and planned for more transparent cross-border e-delivery in Europe. The big news was the launch of the Deliver in Europe database which will be a free resource for couriers and logistics specialists to list themselves on, which will help e-commerce companies find logistics partners to make their products available to more customers across Europe. It’s been calculated by the EC that only 15% of European consumers shop online across borders and the EC is putting in funding to open up markets, stamp out price fixing in the delivery sector and help smaller e-commerce players reach new audiences.
Will Brexit hold back cross border e-commerce to and from the UK? The European experts I spoke to at the conference were sure it would, and many voiced frustration that the UK has opted to make e-commerce selling into and from the UK potentially more expensive and prohibitive. It’s too early to know the full outcome of leaving, but today’s speech by the EU Commission President Jean-Claude Juncker doesn’t bode well. He warned the UK that it could not expect access to the EU’s internal market without free movement of people, saying there could be no “a la carte access”. Theresa May clearly has her work cut out, and our European e-commerce growth could be about to take a serious hit.
Alibaba at the eDelivery Conference
International delivery is high on the agenda at this year’s eDelivery Conference which takes place on October 11th in central London. It’s great news that we have a representative from the mighty Alibaba speaking at this year’s event. Find out more about Leah Zhang and how she’ll be giving tips on entering the Chinese market here.
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