The pandemic continues to reshape the supply chain, and recent research shows that one of the biggest changes is in how service providers can work together to tackle last-mile delivery challenges.
The Customized Logistics & Delivery Association (CLDA), which represents final-mile delivery companies, and the Transport Intermediaries Association (TIA), which represents the third-party logistics services (3PL) industry, recently partnered to examine how their members are working together, and where opportunities lie, to combat same-day delivery demands fueled by the “Amazon Effect.” Their report identifies areas where 3PLs and final-mile fleets can and have created new opportunities, including in heavy-goods delivery, healthcare services, and blended warehousing and delivery offerings.
“The final-mile logistics is an important relationship for our members and is a multi-billion-dollar industry that plays an integral role in the supply-chain,” Anne Reinke, TIA’s president and CEO said in a statement. “We brought together the expertise of the two associations’ members as well as industry analysts to highlight that relationship and to pinpoint trends where 3PLs and last-mile delivery providers can join together to compete against Amazon’s market dominance.”
The research—which culminated in a white paper titled The Age of Amazon: Why 3PLs & Last-Mile Delivery Fleets Must Draw Closer—found that Amazon delivers to 72% of its Amazon Prime customers within 24 hours, pushing shippers, logistics companies, and service providers toward next- and same-day delivery. In response, 3PLs and final-mile providers have forged closer connections and created service opportunities in four key areas:
Heavy goods. In response to rising e-commerce activity, the paper identified an opportunity in heavy-goods delivery, especially for “fleets that can meet specialized delivery requirements such as setup and reverse logistics for items such as medical devices, exercise, and home office equipment.”
Medical/healthcare. Increasing demand for medical lab logistics is creating opportunities for those who can accommodate time-sensitive and specialized handling of pharmaceuticals. “Last-mile providers have seen their medical business increase significantly during the Covid-19 pandemic, including work transporting vaccines with hospital networks,” the research found.
Combined services. Freight opportunities in the B2B last-mile sector abound for pallet-sized less-than-truckload (LTL) freight and heavier items that have unique service requirements, including after-hour deliveries to business and residential customers. “These are best met by a combination of 3PL and last-mile providers. Motor carriers and 3PLs are chasing opportunities in the last-mile of this sector to offer blended warehousing and delivery services that smooth order fulfillment for customers that experienced supply chain disruptions from Covid-19,” according to the research.
Local delivery. Last-mile fleets that operate facilities near large urban centers, such as New York City, are seeing demand increase from shippers, 3PLs, and motor carriers to utilize their local delivery services, the researchers found. “These customers are dropping off large-volume truckload and LTL shipments at their docks. Last-mile carriers separate volume loads into smaller shipments and make urban deliveries on repeat schedules, such as distributing shipments to retail stores,” they said.