The 2020 Mid-Year Economic Update_long

Same-Day Delivery, Fleet Tracking Gain Focus in Distribution

To compete with online giants, distributors focus on logistical efficiency.

An emerging trend in delivery and logistics is the increased use of "local delivery," or using delivery networks within localized markets to deliver products in a short time frame. New technology and software are making it easier than ever for distributors to manage their delivery networks and coordinate more efficient logistics.

"(Local delivery) has been around, but it's starting to hit the prime time," says Rob Howard, founder and CEO of Grand Junction, a cloud-based software company that helps distributors access and manage their local delivery networks. "One of the reasons is because Amazon, eBay, Google – bunches of people – are starting to offer same-day delivery programs for consumers. And they have to use the local delivery industry for that, and that is a forcing function to force the professionalization of local delivery and kind of move it to the prime-time."

As same-day delivery becomes more prevalent in the business-to-consumer markets, expectations in the business-to-business sphere are evolving as well, Howard says. Distributors that are able to provide this service can use it as a value-add to help differentiate their business.

"It’s an on-demand world," says Bill Henricks, COO of DGI Supply, in DGI Supply: Building on the Core, part of MDM's 2014 Distribution Trends Report. "[Distributors are] looking to push more value-add on their supply chain partners. … They want to keep their machines fed."

One version of same-day delivery is the "a.m.-p.m." method, where distributors collect orders in the morning, then deliver the orders that afternoon. This is a more cost-effective method of same-day delivery, Howard says. (Read Capitol Coffee’s Proactive Problem-Solving, where Capitol Coffee CEO Charles Brunson talks about why his company decided to switch to this model – which they call a pre-write – from their previous "rolling-warehouse" model.)

Another way that distributors are managing logistics costs is through fleet-tracking technology.

"All of this can boil down into identifying inefficiencies in a fleet's performance and being able to create actionable intelligence so management can take corrective action," says Harold Leitner, vice president of business development for GPS Insight, in Behind the Drivers of Driverless Delivery.

Not only are companies expecting faster turnarounds, but the demands on service level and visibility provided throughout the delivery chain are also increasing. In order to stay competitive, Howard recommends that companies adapt to meet these increasing demands.

"The customer expectation on visibility is higher, and the customer expectation on service level, same-day delivery is emerging and important. If you do not adopt these technologies, you cannot match the competition. You risk falling behind," he says.

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