The Future of Delivery: NMA E-Newsletter #620

Black Friday kicked off the 2020 holiday gift-buying season. As a matter of fact, Black Friday sales this year started in the early part of November instead of the day after Thanksgiving. Most of these sales will likely be online due to the pandemic. According to Digital Commerce 360, US consumers are projected to spend $198.73 billion with online retailers this holiday season. That is 43.3 percent higher than the same period last year.

Even before the COVID crisis, online shopping expanded so quickly that delivery companies struggled to keep up with demand. In September, Ware2Go (founded by UPS) released a survey that showed market shift brought on by COVID-19 prompted unprecedented demand. Ware2Go CEO Steve Denton said in a recent interview, “We’re anticipating this year’s shipping volumes to hit a new peak. With most supply chains already working above their 2019 peak shipping volumes, we recognize that this holiday season will be unlike any the industry has seen.”

That’s this year, but what happens to delivery when the pandemic is over?

Many companies are investing heavily to develop the newest delivery device, whether it’s sidewalk robots, flying drones, or electric cargo bikes. Several plan to go driverless to cut down on the cost of drivers and more will likely make their fleets electric.

Whatever happens, consumers will continue to shop online at unprecedented rates, which means the demand to deliver our stuff will be greater than ever. Logistyx Technologies President Ken Fleming said recently in an interview the changes will last beyond the pandemic, “E-commerce growth is great news for most trucking businesses, especially those supporting e-commerce order fulfillment, as delivery volume to distribution centers and directly to consumers keeps rising.”

One of the most significant changes in delivery is that instead of shipping to a grocery retailer, trucking companies are delivering to an e-commerce middleman warehouse, which then does the final hand-off. This means more final-mile deliveries.

Amazon, the world’s largest online retailer, announced earlier this month that it would expand in-garage delivery for Prime members to 4,000 US cities. In 2017, the company launched Amazon Key to deliver packages inside homes with smart front door locks and indoor cameras for customer reassurance. They wanted to solve the problem of porch theft. Amazon Key drew mixed reviews and had since focused on delivery to garages (and car trunks) in 50 US cities.

Walmart also recently announced that it would team up with Cruise, a driverless car operation owned primarily by General Motors. The two companies will begin a program to test driverless-vehicle delivery of goods directly to Scottsdale, AZ customers. Walmart has also teamed up with Waymo (the driverless-vehicle unit of Google parent Alphabet) in a similar program. The Arkansas-based company has also started experimenting with delivery via flying drones.

Fight for curb space is also intensifying in urban centers. Four cities (Aspen, CO; West Palm Beach, FL; Omaha, NE; and Nashville, TN) are the latest to participate in pilot programs to evaluate apps that supposedly will help improve congestion by renting curbside time for delivery and rideshare companies.

Cities, mobility companies, urban planners, anti-car activists, and Big Bike all see dollar signs when it comes to the lowly street curb, which was paid for with taxpayer dollars.

New York City recently stepped up efforts to curb deliveries during morning and afternoon rush hours between Sixth and Madison Avenues from 45th to 50th streets. Trucking Association of New York President Kendra Hems said even though a group of trucking associations has asked about the pilot program’s effectiveness, the ad hoc coalition has not yet received an answer from the city. She added there are two other problems for NYC delivery trucks:

  1. Business owners schedule deliveries, leaving truck drivers and delivery companies to pay any fines that are levied, and
  2. Closed streets and newly placed streetside restaurants due to the pandemic have made it harder for truckers to deliver goods.

The future of delivery looks bright for delivery and freight companies, but what about the rest of us? Of course, the convenience of having stuff delivered directly to our doors might save us time and money, but convenience should not be the only consideration. As more and more delivery trucks and other automated delivery devices crowd the roadways, what impact will this have on overall congestion? More personalized delivery intermingled with rideshare and increased driverless car traffic has already had a significant impact on motorists in urban cores. For rural residents, finding goods in stores might become an issue if more products go to a middleman warehouse instead of directly to stores.

Auto manufacturer, delivery, and tech company executives have formed a new group that will grapple with future transport’s thorniest issues. The Commission on the Future of Mobility plans to put together a new regulatory framework for the global transportation sector going through a worldwide transition driven by shared, connected, autonomous, and electric technologies.

Can the industries that profit from these changes be trusted to make decisions that serve the public’s best interests? Likely, corporate interests will take priority, leaving the rest of us to cope with the mobility landscape that emerges.

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