Amazon Masters The Last Mile

Ask any business involved in retail logistics and they’ll confirm the so-called last mile – the section of a product’s journey which takes it from the retailer’s distribution center to its final destination – is the most expensive and complex part of the process.

And shipment expenses are on the rise once again, with mainstream carriers significantly raising prices and competition in the space being fiercer than ever – creating a scenario where gaining the upper hand on last mile retail logistics has rarely been more complex or expensive.

Naturally, when looking for inspiration on how to best navigate the complex world of last mile delivery facilitation, we often look to the biggest names in the game.

Few in the retail space come close to the size of ecommerce titan, Amazon – having recently stolen Walmart’s long tenured reign as world’s largest company by revenue – so it is unsurprising that we turn in its direction to learn how this retail juggernaut has mastered the last mile.

Amazon

With last mile costs accounting for nearly 53% of the entire shipping process, it’s no surprise that Amazon is constantly innovating in this area. Most of us are aware of Amazon’s Prime paid subscription service which promises next day delivery alongside a range of other features, but the retailer is never content to rest on its laurels.

Firstly, there is the Delivery Service Partner Program where individuals interested in starting their own logistics business. The partner invests money, assembles a team, and Amazon provides the demand, technology, and, of course, the business in the form of hundreds of packages waiting to be delivered to eager customers.

While Amazon still reaps the benefits of around 2,000 of these partners in the US, the global labor shortages brought about by the COVID-19 crisis and the Great Resignation has left many vacancies unfilled.

Despite the masses of red tape involved in getting the project off the ground, Amazon is still committed to its goal of carrying out some deliveries by automated drone. Prime Air was successfully trialed in the UK some time ago, but it has taken significantly longer for Amazon to gain approval from Federal Aviation Administration to test and research the use of the technology in the US – something which has now been granted.

Amazon is particularly keen to tout the green credentials of drone delivery, with the electrically powered and emission free devices being a core part of the company’s commitment to making all its shipments carbon emission-free.

Amazon Scout

In a more grounded effort to deploy the latest in robotic automation in its last mile logistics offering, Amazon has also been testing a land-based delivery system its calling Amazon Scout.

Amazon Scout is a six-wheeled autonomous device roughly the size of a cooler which can roll along sidewalks at a walking pace, cross roads, and navigate other obstacles to make sure small to medium packages get to their final destinations.

Amazon has been testing the devices in Snohomish County, Washington over the last couple of years. Starting with six Scout units delivering Monday to Friday during daylight hours, the test runs were carried out with an accompanying Amazon employee. The eventual plan is for the drones to eventually be let off the leash and allowed to roam free and deliver packages with no human involvement.

"We are delighted to welcome Amazon Scout into our community," said Snohomish County executive, Dave Somers. "Similar to Amazon, we are always looking for new ways to better deliver service to our residents. From the latest Amazon innovation to cutting edge technology, Snohomish County is a great place for entrepreneurial creativity."

The Amazon Scout robot bears a remarkably similar appearance to other similar delivery units which have been tested by big brands in other spaces. Dominoes tested its own version for delivering pizzas in Australia and yet another was deployed PepsiCo to furnish busy students with snacks and drinks at the University of the Pacific's campus in Stockton, California.

These kinds of wheeled delivery robots are likely to become even more popular as autonomous driving becomes increasingly prevalent. With smart vehicles all communicating with one another, it will become easier and safer for these devices to cross busy roads and navigate other obstacles to successfully delivery their cargo.

Final Thoughts

As you can see, Amazon never stops pushing forwards when it comes to the last mile of delivery. Focusing on delivering packages in a rapid and efficient manner with an eye constantly on cost and the customer experience is why this ecommerce giant continues to be a dominant force in the world of retail logistics.

The last mile of delivery is set to be a hot topic at Retail Delivery Connect 2022, taking place in August at The Westin Fort Lauderdale Beach Resort.

Download the agenda today for more information and insights.