“ Have you come up with the answer yet for the last-mile conundrum ?”
That was the question a large retailer recently posed to Craig Rowley , a Senior Client Partner at Korn Ferry , a global staffing consultant . “ My clients are the country ’ s largest retailers ,” he says . “ And the one thing they have in common is frustration with how to get the nearly $ 1 trillion of goods ordered online to their customers efficiently , at a reasonable price and safely . There are three ways of doing that : one is delivery to a home or a business through a last-mile provider . The second is delivery to the store where the customer picks it up , and the third is delivery to a locker or some place like that .”
Some retailers are so frustrated with their alternatives that they are looking into doing their own deliveries , according to Rowley . “ Retailers are experimenting with having their own vehicles and hiring their own people , which could be bad news for last-mile delivery providers ,” he cautions . “ Although this is an emerging trend , I don ’ t think it ’ s a threat to them right now . If retailers only do 10 or 15 % in ecommerce , that won ’ t work . But , when that volume gets to 30 %, it may be a viable option . That says to last-mile providers , ‘ You ’ ve got competition .’ But I expect that to be way down the road .”
Projected Growth of Last Mile
The good news , according to Korn Ferry ’ s Senior Client Partner Melissa Hadhazy , is that despite the challenges , all the signs point to growth in the last-mile for many years . Among Hadhazy ’ s practice
areas is a focus on logistics . “ When we think about the last- mile , all projections point to continued growth throughout the world through 2030 ,” she says . In North America , she foresees that growth will significantly impact outside urban areas . “ We saw a shift in population towards these areas during COVID , and they are still underserved in many ways ,” she points out .
Continued Consolidation in Last-Mile Providers
COVID also dramatically increased the number of last-mile service providers , but Hadhazy expects that number to decrease in 2024 . “ Many of the smaller providers that jumped into the market during the pandemic are being consumed by bigger delivery providers ,” she says .
That consolidation in the industry could mean a change for some employees of the smaller companies . “ Those working for these small providers may not be comfortable working for the larger ones ,” she points out . “ They may chafe under the rules imposed by larger companies and choose to leave those positions .”
Alternative Ways of Getting it Done – Fewer People
An outgrowth of consolidation is that these larger entities will look for creative ways to do the job with fewer people . “ These providers are thinking about using drones , robots , or self-driving trucks to reduce their workforces ,” says Hadhazy . “ Given the challenges of hiring in a low-unemployment environment , they ’ re testing these alternatives in very real situations . Companies are leaning into these
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