With online shopping regarded as one of the most popular online activities worldwide (global online sales reached 2.3 trillion U.S. dollars in 2017) and customers increasingly expecting next-day delivery as standard, it’s no surprise that last-mile delivery companies are feeling the pressure.
On the one hand they are tasked with meeting customer expectations. On the other, in an industry where speed of delivery is critical to success, they have a fleet of drivers – as well as the communities their drivers serve – to keep safe. How do they ensure one doesn’t compromise the other? With increasing difficulty, according to Rob Slack, former President of the Customized Logistics and Delivery Association-CLDA.
“I hear it all the time, ‘you buy this and it’s free delivery’ but there is no such thing as a free delivery,” he said. “Somebody is paying for that delivery and if the retailer has built it into the cost of the product they are going to try to get that delivery done as inexpensively as possible. I’m very much against this pressure on the courier industry to keep reducing their costs because the only way they can reduce their costs is to reduce the quality of their service; potentially using unsafe drivers.”
The squeeze at some of the major internet retailers puts pressure on drivers to work for less, said Slack, who is now President and Managing Partner of contract vendor management service, Flexible Workforce. “That can be dangerous,” he said. “We give our clients the advice that they can cut costs in certain ways in terms of internal operating structures but when you start cutting the pay of the driver in an effort to keep costs down, you’re just going to get a worse driver.”
Whether using employees or independent contractors for deliveries, managing safety during the last mile is crucial—yet not simple—said Slack. “If you are not doing background checks and not having drivers properly trained, those things are going to come back to bite you,” he said. “These guys are out on the street making decisions for themselves. Sometimes they make good decisions, sometimes they don’t make such good decisions. Trying to sort out the good drivers from the bad drivers can be difficult.”
The most crucial stage of the sales process
Potentially hundreds of miles, the last mile – or final hurdle of the sales process – is integral to customer satisfaction. In fact, 96% of shoppers say that a positive delivery experience encourages them to shop with that retailer again.
“The last mile is the most critical mile,” said Slack. “If it isn’t performed properly then nobody else in the entire supply chain is going to be happy. If the customer doesn’t get their product in a timely fashion, in the shape that it’s supposed to be delivered in then everybody else in line behind that driver is going to be getting a complaint about them.”
It’s this problem that led Slack and partner Kirk Godby to set up Flexible Workforce. They envisage a future where all companies in need of a driver will make their selection from a national database of candidates.
“With the driver shortage being what it is and recruiting being as difficult as it is, eventually everybody is going to have to work from the same pool of drivers,” Slack said. “There might be a million drivers in the U.S. who are qualified, properly trained, have the equipment necessary and multiple companies can utilize these drivers. It will maximize the driver’s revenue and make it easier on the shipping entity to get things done by selecting a driver from the pool.”
According to Slack, this would make it easier for recruiters to identify skilled, safe drivers. “We encourage drivers to go through training courses and add that information to their profile,” Slack said. “Then, when someone is looking for a driver they can view that driver’s training. The more training that a driver has, the more likely they are going to be at the top of a company’s list. Training is an asset for the driver to market their own services.”
Of course, as Slack has explained, managing the last mile goes beyond recruiting a driver, even one with substantial training. Driver safety is reliant on retraining attitudes around safe driving and an ongoing commitment from a driver to improve their performance on the road. Similarly, managing the safety—and all other aspects—of the last mile requires ongoing commitment.
“You can’t set a last mile service up once and walk away,” Slack added. “If it’s going to run like a clock, you’ve got to wind that clock every day.”