What’s Driving the Demand for Crowdsourcing Parcel Delivery in the Final Mile?

What’s Driving the Demand for Crowdsourcing Parcel Delivery in the Final Mile?

parcel delivery

Supply chains and carriers long ago mastered the business-to-business flow of the transportation network. Even business-to-retail shipping has been streamlined to a science when it comes to parcel delivery.  That is where crowdsourcing delivery and shipment services make a world of difference, but why has it taken off in the current economic climate?

E-Commerce Growth

The rising popularity and increasing demand for the gig economy and crowdsourcing apps show clearly in many markets and industries today. E-commerce shipping has forever changed the way consumers shop and the way shippers schedule deliveries. By looking at venture capital flow into parcel delivery innovations, it becomes easy to see the rising demand for services in urban logistics sectors. 

Understanding how e-commerce shapes what transportation service providers can offer to customers sheds insight into future growth opportunities for local and global shippers alike. And that’s especially true as more major retailers, from Target to Walgreens, have launched contactless, same-day delivery services within the past year, according to Logistics Viewpoints.

Market Volatility 

The global pandemic had a tremendous impact on transportation service providers across many industries. Shippers and carriers who were unprepared for large-scale disruptions were forced to take a reactive approach that involved temporary patches and fixes to make up for poor shipping best practices. But the disruptions continued and worsened as outdated systems and platforms struggled to keep pace with evolving market demands. As the barriers to entry in e-commerce have gone down, that has created even more demand for parcel deliveries. This occurs as more merchants and options come online for consumers to choose from. Despite options, customers have higher expectations than ever. Getting a package delivered on time is paramount to e-commerce success ‘table stakes.’ As last-mile delivery costs are now 41% of total logistics costs, according to Capgemini, and both UPS and FedEx turning away customers that don’t meet their profitability standards, it is more critical for shippers looking for parcel delivery to diversify their carrier network, employing non-traditional parcel carriers, such as those offered in the flexible fleets of crowdsourced parcel delivery in the final mile.

A new approach was needed, giving rise to the concept of crowdsourcing parcel delivery and shipment services. According to Supply Chain Dive, gig-based delivery companies, including crowdsourced services, have become more popular than ever. Most did not exist before 2011, and within the past few years, the popularity of these innovative parcel delivery options has skyrocketed primarily due to continued market volatility. 

Capacity Crunch / Talent Shortage

The changes brought about by market volatility and the increase in e-commerce shopping opportunities also brought about a level of capacity and driver shortages that were unpredictable at best. Final mile logistics has become a proving ground for many retailers as they struggle to set themselves apart by offering the best parcel delivery options. 

Growth of Non-Traditional, “Gig” Economy Workers

Reliable parcel delivery that is also cost-effective and scalable is of the utmost importance to transportation service providers. According to one survey by Internet Retailer, nearly 60% of consumers say they spend more money and make more frequent purchases from retailers that offer fast, easy, and affordable online shipping services. The same survey showed that just under 50% of young consumers talk about their experiences online and on social media platforms. As e-commerce shopping habits shift and their preference for interacting with brands and service providers fluctuates, gig workers and crowdsourced shipping providers are becoming more in-demand than ever. Another consideration, especially in the e-commerce led economic boom, is the look at customer acquisition costs. Customer acquisition costs are often much higher than keeping a customer. 

For example, it can be up to six times more expensive to acquire a new customer than to retain an existing one. Brands should also know the lifetime value of a customer, where repeat purchases are paramount to add not only market share but to overall unit economics profitability. By reducing late deliveries and instances of damage, brands can provide a better experience and gain more revenue and profits through repeat purchases. Brands should think about the final mile as an ROI-positive investment that can positively impact their bottom line.

Crowdsourcing Parcel Delivery Enables More Regionals Than National Parcel Carriers Too

Shipping at any level, from city and state to national and even global, can benefit from the innovations of outsourced delivery services. Crowdsourced delivery services have flourished in recent years because the technology needed to offer these services is now compatible with such applications. There has been a profound technology shift for transportation service providers, drivers, warehouse staff, freight forwarders, and even consumers in recent years. And part of that includes working with fewer national carriers and tapping the potential of highly localized, regional parcel carriers. Remember, crowdsourced parcel couriers, are a form of regional carriers too.

Today, everyone has a GPS computer in their pocket, thanks to the popularity and prevalence of smartphones. By leveraging that technology, a crowdsourced delivery platform can open doors to new regional and national capacity while simultaneously expanding carrier access and availability. 

Expand Parcel Delivery by Capturing and Analyzing Data to Know Where to Target Your Efforts

The rise in popularity of e-commerce, crowdsourcing apps, innovative parcel delivery services, and same-day delivery has forever transformed how last-mile delivery to consumers is handled. With last-mile shipping services changing due to escalating market demands and consumer needs, the traditional fulfillment processes must be adjusted accordingly to offer new and cost-efficient ways to deliver products to customers. 

The key to this growth and success is utilizing and applying the insights uncovered through transportation analytics platforms that ingest shipping data, clean, normalize and offer guidance for shippers to make smarter shipping decisions all geared towards improving the bottom line. Request a consultation with Intelligent Audit to start tracking data on the package level to ingest data across the expanding number of last-mile, crowdsourced deliveries and get those insights needed to delight customers and increase profit margins.

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