E-Commerce Last Mile Discussion

Transcription

1 E-Commerce Last Mile Discussion Curtis Spencer, President, IMS Worldwide, Inc. Ben Conwell, Sr. Managing Dir., Cushman & Wakefield Kelly Picard, CEO, Hackbarth Delivery Service

2 Today s Speakers Curtis Spencer President IMS Worldwide, Inc Ben Conwell Senior Managing Director Cushman & Wakefield Kelly Picard CEO Hackbarth Delivery Service

3 E-Commerce Headlines ChinaDaily, April, 6, 2016 Chinese E-commerce giant Alibaba Group it has officially become the world's largest retail platform, with its total trading volume online in the fiscal year ending in March 2016 surpassing Wal-Mart's annual sales. Wall Street Journal, May 5, 2016 Amazon to acquire 20% of Atlas Air Worldwide Holdings, partner for global air cargo delivery 20 New Aircraft for Amazon! Wall Street Journal, May 4, 2016, New US Importing rules make foreign goods better deal for on-line shoppers NO DUTY FOR $800 or less.

4 E-Commerce Impact By 2020, the US will sell 486 Billion of goods to the world in cross border e-commerce By 2020, the US will buy 140 Billion of goods from overseas in cross border e-commerce This will require 160 NEW e-commerce logistics centers of 800,000 SF size to be built in the top urban markets Another 110 NEW or re-purposed facilities of 75, ,000 SF sites are necessary to support local delivery in key urban markets Dr. Jim Tompkins, April 2016

5 What is Last Mile? From the last point of distribution or sortation to the final destination at a home or business. WalMart, order today, receive shipment tomorrow, second day or three-five day delivery depending on final delivery zip code. Amazon, last mile means within 2 to 4 hours. Next Day = order by midnights, get it by noon - 5 next day. Most others say it means: order by noon, delivery today before 8PM, inventory and logistics have to be compressed to accomplish this!

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9 Getting Local Kelly Picard CEO

10 What is the Last Mile? The last mile is a metaphor used to describe the movement of goods from a fulfillment center to their final destination. Not a new concept

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12 Industry Sectors with High Demand Omnichannel What is it? Omnichanel is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store. Perishable Goods, Retail, Vehicles, Consumables & Durables Winners will be those who control costs while achieving high customer satisfaction (Walmart recent Activity) Key will be getting product to consumer where and when they want it: Problem is Cost

13 Last Mile Costs: Not a New Problem For U.S. retailers with broad global supply chain operations, "last mile" the portion of transit from the final delivery center to the customer's door is really the last hundreds of miles from the destination port to the store. This crucial part of logistics, which accounts for the majority of a shipment's cost and complexity, is becoming increasingly difficult for retailers to manage. Francis Walsh III, June 2006 Where it Works: Large Metros, with Population Density How It Works: Line hauls from DC / FC to local warehouse of last mile providers (Regional and Local Carriers) DDU (USPS) National Parcel Carriers (UPS, Fedex) Why it Works: Volume; Location (proximity); Route Optimization; Get LOCAL!

14 Factors for Site Selection Last Mile Providers LOCATION, LOCATION, LOCATION and COST Proximity to Population Density Good Access to Highways Dock High & Grade Level / Ramp Security Demographics Cost Per Mile to Serve Ability to Scale Building Configuration

15 Dynamic Routing / Optimization

16 Why is this important? COST is # 1 factor : Concept of Free Delivery According to Peerless Research Group, largest increases in costs are in areas of Transportation and Labor How people Buy is changing, driven by technology Boomers vs Gen X vs Millennials (Check 21 and impact on Banking) Retail Growth is coming from Online Sales. Will this replace the Brick & Mortar? KPIs and Customer Service Satisfaction

17 Resources The Customized Logistics and Delivery Association (CLDA) Retail Industry Leaders Association (RILA) National Shippers Strategic Transportation Council (NASSTRAC) Tompkins International Jim Tompkins

18 Ben Conwell Senior Managing Director Americas Leader ecommerce Special Practice Group Industrial & Logistics Services Cushman & Wakefield

19 It s Only the Biggest Disruption Since About Ever Changing customer demands: Seamless, predictable and consistent service level across all channels Radically disrupted inventory planning demands associated changes to supply chains Understanding and deploying the appropriate technologies to drive speed, accuracy and efficiency Reverse flow: Return Conundrum Identifying and managing the right partners (e.g. 3PLs) Delivery capacity, speed and cost (value) Conwell s Last Mile Proverb

20 Sticks & Bricks Retailers Should Compete How? All leading physical retailers focusing heavily on leveraging store footprint the Anti-Amazon Wal-Mart, BestBuy, CVS, Target, Nordstrom, other retailers expanding investment in alternative service models Demonstrated and proven lessons learned from EU and throughout Canada Have to leverage the key assets you have Ship From Store Click and Collect

21 World Domination Amazon Style FC network expansion scale drives value Amazon Logistics Branded trucks ATSG & Atlas air service Buy balance of Colis Prive and continue to build in EU Become registered NVOCC Finally cop to actually being a transportation service provider Private labels Fresh offering and Prime

22 Amazon Logistics Representative Supply Chain Flow 3PL (Select SKUs) Port Receive Centers Fulfillment Centers Sort Center Vendors AMZL or Contract Carrier AMZL or Contract Carrier AMZL or Contract Carrier Sort Center Fresh / Prime Now Depot AMZN Locker AMZL or Contract Carrier AMZL or Contract Carrier USPS Direct Postal Injection (local PO) USPS Route Delivery

23 Evolution of Building Type & Location

24 Last Mile Innovation is White Hot UberRUSH Lyft (Walmart) Instacart (Whole Foods!, Costco, Target) ShopRunner (Brooks Brothers, Saks, adidas, Ralph Lauren) Postmates Deliv (UP$!, Simon, GPP, Macy s, Kohl s, Walmart) Google Express (starting grocery) ebay Munchery DoorDash Roadie (want a waffle, smothereds and coffee with that?) Shyp Curbside (CV$, Best Buy, Target, Simon) Drizly (booze) AMZN Logistics (Flex etc.) Lockers NestDrop (and Doritos too?) Gannetts (experimentation with paper delivery infrastructure) USPS Canada Post

25 What If You re Not Amazon? Limited larger retailers are able and willing to handle delivery in certain markets, but most have to hire it out Fulfillment mostly done by 3PLs or the usual contract carriers - same day, next day, two day or slower Thousands of retailers need 3PLs and ecommerce shipping specialists to perform fulfillment through last mile delivery The 3PL Boom Cross dock terminals Multi-customer ecommerce facilities

26 They All Have Common Needs And they have little choice And little time. Fulfillment and last mile are too capital intensive for everyone to have their own have to hire it out Most often not a core competency Have to continue to invest in reinventing their networks and buildings towards omni-channel

27 Thank you!