Challenges and Technology in Last Mile Delivery Business

Couriers face challenges meeting rising customer expectations, utilizing technology for efficiency and preparing for AI integration in the next five years.

### The Last Mile: Challenges and Opportunities in Courier Services
* 🚚 The last mile delivery sector faces challenges due to rising customer expectations for **service, communication, quality, and transparency**.
* 📱 Couriers are using technology for **operational excellence and efficiency**, including **route optimization** and **mapping technologies**.
* 👀 Customers prioritize **visibility and real-time tracking of their orders**, which is a **key expectation** for couriers to meet.
* 📈 The market is fragmented, with some companies **struggling to keep up with technology advancements**.
* 🔄 The distinction between courier and parcel services is blurring, with many companies operating in **multiple sub-verticals**.
* 🤖 The next five years are expected to see continued adoption of modern tools like **route optimization**, with AI becoming a key technology for companies that have prepared by implementing these **building blocks**.
* 🤝 Market consolidation is already happening, with smaller organizations joining forces to benefit from **economies of scale**.
* 🏢 Dispatch Science, a company specializing in transportation logistics, offers solutions for **route optimization and automation** in the courier sector.

[Music]: What's going on in the world of couriers in The Last Mile? I'm joined today by Arthur Axelrod. He is CEO and founder of Dispatch Science. Hi Arthur, good morning. Thank you for being with me. I really appreciate it. What are some key challenges that you can identify out there in the delivery business, with particular emphasis on the last mile? The Last Mile has become a very, very interesting space. It's got definitely its set of challenges. We're seeing a lot of pressure from the consumerization of expectations on technology. Companies are faced today by end users that have really high-rising expectations in what they expect in terms of service, communication, quality, transparency, and things of the like. I like your use of this word consumerization because it suggests that people aren't buying technology just because they're shiny new things and they're very attractive. They're doing it in order to meet specific demands by the customer. So how are couriers using this technology right now to achieve this operational

excellence and efficiency. Well, couriers themselves are just a part of the supply chain, of course, uh, and, uh, they're very often times servicing companies, shippers, who themselves are servicing those end customers. So, what couriers are challenged with is, uh, providing a service that goes beyond just their customer, a shipper, or retailer, but the customer's customer. So, offering the ability to have extremely, um, capable like integration and methods of communicating up and down the supply chain to the different stakeholders. How do couriers determine, like, what are the most cost-efficient routes? I mean, we have to serve the customer and please the customer, but there's also a cost associated with that. So, how do they do that? It's a challenge. It's a big challenge, particularly, uh, those cers that are servicing shippers that are sending large high volumes of, uh, of parcels to a warehouse that could be arriving on a moment's notice or just the night before. And now they're sitting there with a 53ft

trailer that they have to unload, and and sequence, and segment into individual orders. It's traditionally been a very, very laborious manual exercise, and those that are uh embracing technology are now, you know, leveraging uh solutions to, to solve it using, uh route optimization, uh mapping Technologies, uh ways of, of sequencing stops, and, uh planning routes that allow them to, to be efficient, uh and and and react much more quickly than those that, uh are are still using paper and spreadsheets, yeah efficiency is certainly something that the service providers are interested in, but the customers really, what do they care about, they care about visibility, right, that's right, where's my order, where's my order, like right now, when is it coming, um, they're ramping up those expectations to the point where our couriers and and and deliverers able to meet those expectations now, uh well the Market's very fragmented, so there's those that haven't fully embraced technology that are very much challenged by that, and and at risk, and then there's those that have experimented over the years and slowly

uh grown maybe they're still using older technology that's not quite as as real time as as today expects. There are some companies that are uh have attempted to go it their own way and build their own Solutions homegrown and are struggling to now keep up uh with those companies that are embracing off-the-shelf solutions that specialize in leveraging the cloud and and Communications and AI to to make all of that information flow freely. Just to be clear on what we're talking about here, we need to distinguish to some degree The Courier business and the parcel business. I mean that one is part of the other and a little bit distinct. You said couriers are fragmented when I think parcel at least a few years ago certainly not fragmented. The two big two big Services that's changing though is it not even on the parcel side. Is that also more players out there it is and what's interesting too is that uh there are some companies that are essentially operating in multiple sub verticals where they're attempting to service.

segments such as doing uh deliveries for uh for Life Sciences or for food or or for retail uh or or for big and bulky so uh what's what's happening is uh many many Transportation companies couriers uh offer all of the above or some combination and so their challenge now is to is to find technology that allows them to meet the different needs uh of those for example uh the the expectations for a driver picking up uh uh prescriptions at a pharmacy to deliver to a a residential consumer are different than the expectations of U A twers Team delivering a fridge and doing an an installation um yet the same technology is expected to and and utilized properly can service both let me hit you with the impossible question tell me how you see the next five years in this sector what's going to happen uh I I believe that uh there'll be a continued adoption of these these modern tools like route optimization uh and and Mobility uh and applications and those will themselves become the Foundation layer for the next level of companies that wants to now

leverage AI. So, artificial intelligence is definitely around the corner. People are starting to use it in certain aspects. There's the portion of machine learning looking at huge swaths of data to help improve the solutions, the optimizations, the algorithms. And then there's the generational AI, using it to create orders, using it to communicate directly with customers, and service those portions of the business. And I think only those companies that have prepared themselves by taking those, implementing those building blocks, taking those initial steps will be in a position to leverage AI. Do you see continued fragmentation of the market, or we see some consolidation in those coming years? We're seeing consolidation right now. I think that the smaller organizations, in order to really benefit from a lot of the technologies and economies of scale, are combining and joining forces with other larger companies or groups of companies to be able to offer coverage in more markets, to offer more use of

fleets, uh, a bigger mix of vehicle types and the like. Thank you so much, Arthur, for your insights into this really interesting and ever-changing marketplace of couriers and parcels. I appreciate that very much. But let me take a moment to ask you specifically about Dispatch Science. Who are you folks and how do you fit into this whole picture? Oh, thanks, uh, well, we, uh, we started off like almost 14 years ago as a boutique cloud and mobile, uh, development studio focusing on transportation logistics. And over the years, uh, developed solutions that allowed us to identify these opportunities for route optimization and, uh, automation, particularly for dispatching and for, for route planning. We connected the dots and over six years ago launched Dispatch Science and, uh, are appreciating the growth we've been seeing since then. Thanks again, Arthur. I really appreciate your time. It was a pleasure. Thank you for the opportunity. I've been speaking with Arthur Axelrod of Dispatch Science. Thank you very much for watching.

How the Parcel Sector Is Stepping Up to Meet Customer Demands

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Challenges in the Last Mile Delivery Business

The last mile delivery faces increasing pressure from consumer expectations for high-quality and transparent service.

Couriers are using technology to achieve operational excellence and efficiently communicate with all stakeholders in the supply chain.

Determining cost-efficient routes while meeting customer demands poses a significant challenge for couriers, especially when dealing with large volumes of parcels with unpredictable arrival times.

Leveraging Technology for Efficient and Visible Delivery Operations

Delivery operations are transforming through technology, with a shift towards route optimization and real-time planning to improve efficiency.

Customers are increasingly concerned about visibility and expect real-time tracking and delivery updates.

The industry is fragmented, with some struggling to keep up with the use of off-the-shelf solutions that leverage the cloud, communications, and AI.

The Impact of Technology on Transportation and Delivery Services

Transportation companies are facing the challenge of finding technology that can meet the different needs of various delivery segments, such as medical deliveries and large item installations.

Over the next five years, there is expected to be continued adoption of modern tools like route optimization and mobility, with a shift towards leveraging artificial intelligence for order creation and customer communication.

The industry is currently experiencing consolidation as smaller organizations join forces with larger companies to benefit from advanced technologies and expand their market coverage.

The Evolution of Dispatch Science in Transportation Logistics

Dispatch Science started as a cloud and mobile development studio 14 years ago, focusing on transportation logistics.

Over time, they have evolved to provide solutions for route optimization, automation, dispatching, and route planning.

The company launched Dispatch Science six years ago and has since experienced significant growth in the industry.