The ability to offer the same delivery is rapidly becoming a differentiator among retailers and other shippers. According to Business Wire, “The same day delivery market in the US is poised to grow by $9.73 billion during 2020-2024, progressing at a CAGR of about 22% during the forecast period.” For reference, e-commerce is anticipated to grow at a CAGR of 32.4% and reach $34.2 trillion in the same period, says PR Newswire. In-tandem growth is no coincidence as e-commerce logistics expand, thanks to the Amazon Effect, COVID-19, and general industry trends, the need for faster, more efficient delivery skyrockets. Shippers must take advantage of local drivers to meet these same day delivery expectations and volumes.
Using a TMS to Execute a Final Mile Strategy that Yields Desired Outcomes
Why Customers Expect Same Day Delivery
The full rush is on to build and execute a foolproof same day delivery capability that leverages a connected supply chain. Deloitte explained, “By 2023, same-day delivery will be the norm for most e-commerce purchases. Nowhere is this expectation more apparent than in large metropolitan cities, with their high concentration of millennials, high-end consumers, and dual-income families. Roughly three-quarters of urban shoppers have bought products on their mobile device, and about half say that same-day delivery is important to them.”
Deloitte further identified several notable trends, including that 58% of consumers want to search for products online by same day delivery service when shopping online. For those that place orders before 5 PM, 64% expect next day service. The demands are more pronounced among mobile shoppers—which includes a whopping 51% of urban adults. Approximately 45% expect same day service in urban areas, and 34% of suburban shoppers want same day service and delivery.
At the same time, volume and available drivers are already tight. Therefore, shippers must look for ways to increase capacity. And local drivers provide a viable option.
Same Day Delivery Means Same Day, Locally Sourced Drivers
The issue of the gig economy continues to cause problems within transportation management. While it can indeed bring less-experienced drivers into the mix of local drivers, it’s essential to realize that the gig economy can apply to traditional drivers as well. Think of it like this; local drivers could similarly move LTL shipments and still be required to have the appropriate CDL. Not all gig economy drivers can claim to have a CDL, so that’s the distinction. Instead, same day delivery services should focus more on the local drivers ready and willing to work for the LTL moves. This may include parcel if those parcels go through a consolidation phase and become portions of LTL loads.
Now, that sounds ideal. But it includes a need to deconsolidate and still move the parcels to the destination. As a result, local drivers’ use for local LTL loads is best to expand urban order fulfillment centers’ footprint throughout a metropolitan area. This may apply to suburban areas as well. However, the onus rests on urban shoppers. Once that is possible, companies can begin working more with local hotshot and more iconic gig economy drivers—like what delivery services are doing in the grocery sector. With peak season costs growing year-over-year and uncertainty still a factor, the key is keeping the whole conversation local and focused on following the most optimized route and process to achieve same day delivery.
Additional Best Practices to Offering Same Day Delivery
Shippers should further follow these best practices to streamline same day services for drivers and when tendering shipments:
- Build a localized fulfillment network, such as using warehousing space in empty commercial lots to pack and ship local e-commerce orders.
- Use brick-and-mortar stores as same day fulfillment centers, taking advantage of in-store associates and workers.
- Give drivers more straightforward access to available loads using a SaaS-based TMS that highlights the most painless and most lucrative loads available for a local area.
- Recognize that local drivers expect faster freight settlement processes, using digital capabilities to process and pay driver invoices without delay.
- Digitize the auditing process to identify problems and opportunities for improvement, avoiding delays in payment, and ensuring landed freight costs reflect original quotes.
The Takeaway: Integrate Same Day Services Into Your TMS to Survive
It all adds up to one achievement—being able to apply end-to-end route and inventory optimization to offer same day service. And that functionality resides within an advanced TMS and following the best practices above for both LTL freight and parcels that need same day service. It’s time to bring delivery into the next industrial revolution with a same day service offering that will work throughout and beyond peak season and disruptions.