Image credit: Owen Billcliffe
Author: Kevin Savage, Chief Operating Officer, Delivery Mates
As the world grapples with the challenges of climate change and the need for more sustainable practices, the logistics industry is undergoing a profound transformation.
I had the opportunity to participate in the recent Leaders in Logistics conference where the innovative trends in shaping the future of the sector were actively discussed.
Sustainability – a pivotal concern
Sustainability was a central theme at the conference and one idea that stood out was the notion of sustainability at the same price.
While the logistics industry acknowledges the importance of adopting eco-friendly practices, the real challenge lies in implementing these changes without increasing costs. It’s clear that retailers and shippers are hesitant to make the switch to sustainable options if it means compromising on affordability or speed.
One of the issues raised at the conference was the segregation of sustainable shipments from existing shipping locations. How can businesses seamlessly integrate green logistics solutions without disrupting their current operations? This question lingers as a challenge that needs innovative solutions. While the industry recognises the need to reduce its carbon footprint, it is essential to find ways to make sustainability economically viable for all stakeholders.
Cargo Bikes – from novelty to normalcy
One of the most compelling success stories presented at the conference was the transformation of cargo bikes from novelty to a mainstream delivery method.
For Delivery Mates, we proudly announced that we had delivered over one million shipments in the first half of 2023 using cargo bikes. This feat underscores the remarkable progress in this domain since we introduced cargo bikes at scale in 2019.
Today, cargo bikes have evolved to the point where they can carry up to 250kg at a time and offer a spacious 2 meters³ carrying capacity. They have achieved productivity level parity with traditional delivery methods, all while improving the quality of the delivery process. However, one of the current bottlenecks in this sector is the availability and supply of cargo bikes. Fortunately, manufacturers are making significant strides to address this challenge, and there are promising developments expected in 2024.
Maintenance and support for cargo bikes have also been a concern. To tackle this, we have introduced our own telematics and maintenance teams, ensuring that cargo bikes stay on the road. This commitment to after-sales support is a testament to the dedication to making cargo bikes a reliable and sustainable choice for urban deliveries.
Key industry shifts
In addition to sustainability and cargo bikes, the conference featured several insightful discussions and presentations that shed light on the broader shifts affecting the logistics industry.
1. Rise in “Out of Home” Deliveries
One notable trend discussed was the rise in “Out of Home” (PUDO/Lockers) deliveries across the European Union, which have increased by a remarkable 44% year-on-year. The reasons behind this surge are complex, but the growth of reseller platforms like Vinted, where Out of Home deliveries are prevalent, is undoubtedly a significant contributing factor. It’s clear that consumers are becoming more receptive to these alternative delivery methods.
2. Global e-commerce and chinese shippers
The landscape of global e-commerce is changing rapidly with Chinese shippers like Alibaba making a significant impact. Consumers are now reevaluating their choices, favouring cheaper products, even if it means longer lead times. This shift has the potential to disrupt traditional e-commerce dynamics and challenge established players.
3. Returns challenges
Returns continue to pose a major challenge for retailers, extending beyond the realm of fashion apparel. It was eye-opening to learn that some retailers are now charging for returns as a way to manage the problem. Additionally, e-retailers are increasingly imposing limitations on free shipping, often introducing minimum basket sizes, signalling a shift in consumer expectations and business strategies.
Attending the Leaders in Logistics conference was an enlightening experience, offering a close-up view of the ongoing transformations and challenges in the logistics industry. The idea of achieving sustainability at the same price is a thought-provoking concept as businesses navigate the path toward greener practices. Cargo bikes have evolved from being a curiosity to a reliable and efficient delivery method, and there are exciting developments on the horizon. Moreover, the broader shifts in the industry, such as the rise of “Out of Home” deliveries, the changing dynamics of global e-commerce, and the persistent issue of returns, all point to a dynamic and evolving landscape.
As the logistics sector continues to adapt to the demands of the 21st century, it is clear that innovation, sustainability, and adaptability will be the driving forces behind its future success. The Leaders in Logistics conference served as a valuable platform to explore these trends, and it’s evident that the industry is poised for an exciting and transformative journey.