Last Mile Solutions

The last stage of a product on its way into the customer’s hands is keenly contested by retailers and logistics companies. This final route should be cost-efficient, safe, fast, and to the customer’s total satisfaction. The multitude of interdependent variables, such as the traffic situation and delivery time or location, is a major challenge. The implementation of new technologies enables innovative last-mile solutions.

RECENT DEVELOPMENTS

The demand for last-mile delivery services is spiking based on changing customer demands and market conditions. Regarding this forecast, the market is expected to triple by 2030, providing opportunities for new technologies and business models. Also, the COVID19-pandemic changed how consumers buy goods and spiked the demand for home-delivery alternatives over more traditional in-shop experiences. A “new normal” has emerged especially in regards to the delivery speeds that customers expect when they order online. According to a study conducted by McKinsey 46% of respondents abandoned shopping carts online because of shipping times that were too long or not provided.

From a technological point of view, technologies such as autonomous vehicles and robots, delivery drones, and (autonomous) drone swarms are enabling new and faster last-mile solutions to cover demand. These technologies enable contactless and/or fast last-mile solutions in urban and rural areas that would otherwise not be profitable.

Tracking is another trend on the rise for improved last-mile solutions. Using smart tracking devices through the internet of things, smart technology and sensors combined with algorithms and data analysis shipments can be successfully tracked in real-time.

Additionally, newly established micro fulfillment centers (i.e. small, automatized fulfillment centers in proximity to customers and existing store infrastructure) and vast automatization are on the rise. Faster delivery expectations, cold chain demands, inflation, and a labor shortage are accelerating the adoption of these trends.

The new normal in logistics comes with hurdles too. The shortage of drivers in the UK due to Brexit highlighted the increasing shortage of drivers. In conjunction with driverless trucks, the role of drivers will change. Some experts believe that drivers will become merchants, selling items from trucks, or providing services. Another challenge is sustainability in last-mile ecosystems. Regulations and shifting customer expectations are pushing companies to both improve the sustainability of their supply chains, eg reducing emissions and traffic jams, and provide transparent information to prove sustainability claims.

IMPLICATIONS FOR THE HEALTH INDUSTRY

The shift to e-commerce and demands for the last mile are also impacting the health care industry. The last mile for medical deliveries presents several unique challenges compared to e-grocery or fast fashion. Delivering medical supplies and equipment is different from other goods:

Starting with the easiest but still hard part, delivering pharmaceuticals. Vaccines, gene therapy, and many new forms of drugs are sensitive to light, temperature, humidity, and many other external factors. In the first sequence of the supply chain, these factors are well-controlled as pharmaceuticals are stored in large containers and logistics has established proven processes. However, the last mile is different. According to the Biopharma Cold Chain Sourcebook, the spending on biopharma cold-chain logistics is expected to reach $ 21,3 billion in 2024. Logistics companies are accelerating their growth plans and investing in cold chain infrastructure and capacity for medicine delivery. UPS launched a permanent service called UPS HealthcareTM to serve the needs of complex pharmaceuticals safely. Since a lack of temperature stability might spoil drugs, the demand for transparent tracking solutions and well-educated drivers increases.

The shortage of well-educated drivers plays an even larger role in the last-mile delivery of medical supplies. Besides the close monitoring of the temperature, other additional services such as installation or quality checks are essential at the point of delivery. Therefore, driver continuity is a crucial factor, but hard to obtain these days.

However, the last mile of healthcare has a different face in less developed countries. Half of the world’s population still lacks access to primary healthcare. Crucial healthcare services are needed in Sub-Saharan Africa and Southern Asia. Needs behind last mile solutions are basic in these regions and differ totally from expectations like drug delivery in 30-minutes. New trends based on advancing technology like telemedicine, doctorless exams with the help of sensors and artificial intelligence or at-home-medical laboratory tests or at least “not-at-lab” laboratory tests could help bridge the gap and reduce the last mile to zero at least in the case of key health services.

MICROTRENDS

Pharmaceutics within 30 minutes at your home

The German start-up First A has set up a fast delivery service for non-prescription medicine. To ensure that the service runs smoothly, the start-up works with a network of partner pharmacies. When an order is placed, First A sends couriers to the nearest partner. The couriers collect the order and deliver it to the stated address within 30 minutes after the order was placed.

Passive packaging for the cold chain

pelibiothermal.com

temprify.com

coldchainpacking.com

A Saudi Arabian company, Peli BioThermal, claims to be the first cold chain packaging solutions provider that offers a portfolio of patented and award-winning single-use and reusable thermal protection packaging solutions for the safe transport of pharmaceuticals, clinical trials, diagnostics, tissue, vaccines and blood supplies for the life science industry. The Credo ProMed™ carry bags are durable enough to withstand bumps and rugged conditions for on-the-go transport. The containers are temperature controlled and keep medical materials at the required temperature for up to 72 hours.

Similarly, temprify, an Austrian start-up in the portfolio of Greiner Innoventures, offers reusable boxes which flexibly adapt to the challenges in the pharmaceutical industry with a wide range of load sizes, holding times, and temperatures down to -60 °C.

Automated route planning for more efficiency

paragonrouting.com

Paragon provides vehicle routing software that assists when delivering drugs and medical equipment even for the last mile. Paragon’s software was implemented at their UK-based customer LF&E Refrigerated Transport. LF&E provides guaranteed and timed deliveries in two-hour windows with notifications via text the day before to increase delivery success. Using Paragon’s software, LF&E has continuously achieved a first-time delivery rate of 98.9 percent for around 1500 consignments every week.

The Last mile: Key to basic health care

>projectlastmile.com

tipglobalhealth.org

“If you can find a Coca-Cola product almost anywhere in Africa, why not life-saving medicines?”, asks Project Last Mile, a multi-sector partnership. Project Last Mile believes life-saving medicines should be available to all people, regardless of where they live. In Africa, nearly 50% of people lack access to critical medicines. The program is working to change that by leveraging the existing Coca-Cola logistic system.