Unlock the potential of parcel logistics: lessons from the disruptors and innovators

In business you can never rest on your laurels. You have to forget the successes of yesterday and focus on achievements tomorrow. This isn’t always easy, especially for big companies with a large market share. 

Clayton Christensen, the theorist of ‘disruptive innovation’, said, “The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption.” 

With this challenge in mind, it’s important for all parties to learn how disruptive startups are making progress in the last mile delivery sector. 

But before we do that, let’s take a moment to discover what the market conditions are that provide young companies with the opportunity to get impact.

Good conditions for disruption

There are a number of factors in play right now which help innovators. These include:

• The arrival of new technologies
• The demand for more sustainable operations
• The pressure for a better customer experience (CX)
• The rise of big tech

Having learned a bit about the context, we can now go on and look at the specific areas where disruptors are breaking through.

Disruption through improved CX

CX is an often-heard acronym in the business world today. Last mile delivery sector is no exception. 

To address the demand for a faster and more convenient service, startups such as Instabox and Paack are offering innovative solutions for consignees. Instabox uses automated parcel lockers to make things more convenient. While Paack lets you schedule delivery timeframes to prevent you from having to wait around all day for deliveries. 

Disruption for sustainability

Quite rightly global warming is changing the rules of the game for businesses. Firms are racing against time to create more sustainable products and practices.

According to the World Economic Forum, “Advanced analytics and Internet of Things (IoT)-based solutions such as load-pooling and dynamic rerouting could contribute to an overall scenario that reduces [parcel logistics] emission by 10%, unit cost by 30%, and congestion by 30%.”

So, how are disruptors responding to this challenge? Budbee, for example, reduces the environmental footprint of deliveries through its network of parcel lockers and streamlined route management system. The firm already serves more than 35 million people in Sweden, Finland, Denmark, Belgium, and the Netherlands.

Cargo bikes are also hitting the mainstream. Cargaroo is a good example for this. The firm offers the parcel logistics sector an eco-friendly alternative to the internal combustion engine. The company is growing fast—biking more than one million kilometers in the last year.

Disruption as a means to compete with Amazon

Over the past fifteen years, the emergence of E-commerce has completely overturned the last mile delivery landscape. This transformation has put traditional parcel logistics companies at a disadvantage when compared with new players like Amazon who oversee an enormous data treasure trove.

Data sharing presents a unique chance for incumbent firms and logtech startups to compete with the data giants and keep diversity in the market.

As a disruptive logtech company, Bettermile leverages data by collaborating among tech partners and industry peers, providing innovative solutions for the last mile delivery. This can be done by being open for partnerships and building a business model based around them, to target the challenges on the final mile. Examples include collaborations with what3words, Google, HERE Technologies, and Truemetrics.io.

What does the future hold for disruptors in logistics?

There are some fascinating new tech developments on the horizon. And these advances will provide the opportunity for even more innovation in parcel logistics. (Read more: Future of Parcel Logistics)

Truemetrics.io, for instance, is making progress in motion data. Their work involves integrating sensors into drivers’ mobile phones. This enables companies to track the precise location of their personnel up until the moment when they reach the consignee’s front door. With this enhanced driver location data, there is potential for further refinement of the geocoding process.

Over the next few years, it’s going to be fun to watch how the disruptors continue to drive through change in the parcel logistics sector. Tech moves at pace and the appetite for a better CX and more sustainable operations will only grow stronger. In response to these trends, we can anticipate the arrival of new businesses that right now we can’t even imagine.

Simon Seeger

Simon Seeger is a logistics industry expert and serial entrepreneur with a passion for revolutionizing last mile delivery. As founder of Bettermile, he has developed a cutting-edge SaaS solution that dynamically optimizes delivery routes in real-time, leading to increased productivity and an enhanced customer experience across 13 countries. Simon's experience in logistics is rooted in his history of transforming traditional industries. In 2009, he founded textunes GmbH, the first e-book platform for smartphones and tablets in German-speaking countries, which he later sold to Thalia Books GmbH. He then developed Tolino, an eBook platform for Thalia, which has a market share of over 40 percent in German-speaking countries, Italy, and the Netherlands.