The Broken Dream of Last Mile Delivery

February 20, 2023

Last Mile Delivery was the hottest logistics segment, given rise of Hyperlocal delivery and e-commerce home delivery. 

Somewhere economics raised its ugly head questioning merit of 2 hour delivery for anything that is not eatable !!

Drones- predictably- were non-starters and unlikely to replace anything other than helicopters used for critical deliveries. (Where? Where?). 

But even biker driven deliveries have a limitation. Costs cannot be below Rs. 35-40 per delivery- assuming 600-800 deliveries a month. Anything less and cost can shoot up (as they always do in lean times) to over Rs. 80-100. 

Can technology help? Well- it can help reduce distance traveled (route optimization), carry more load (load optimization) and ensure better biker discipline (GPS tracking of idle time). But I will submit- hurting my business- this can at best make a marginal difference and that too gets washed out on one rainy day. 

So what to do? 

Answer may be in on-boarding \"unorganized\" parcel or purchuran or chavvani delivery networks- the Masjid Bunder variety. We know of companies with 125 delivery locations in just Guajarat !! (Heard of Dhangadhra, Una, Petlad?).

Every state has a specialized player serving very high volume of delivery and rather accurately. And they have real low cost operations.

I guess field visits to these companies may have a lesson or two for PE funded Hyperlocal/ last mile logistics players !!