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Challenge of Solving Last Mile Delivery

by | Aug 20, 2018

2 min read

Surging demand for e-commerce deliveries pushed UPS and FedEx to invest billions into upgrading their networks. A big part of that upgrade is overcoming the challenges of last-mile delivery.

Last month UPS announced an initiative to test “smart lock” technology to automate package delivery in hundreds of apartment buildings in Manhattan and Brooklyn using Latch’s “smart access system.” This is a win-win for both companies – it makes Latch attractive for landlords to create worry-free package deliveries and decreases repeat delivery attempts for UPS.

The Latch and UPS program enables delivery drivers to drop multiple packages at secure locations (lobby, front desk, package room) inside multi-family buildings. The goal is to reduce package theft, decrease repeated delivery attempts and make the last-mile cost-effective and convenient for the carrier.

Using a handheld device, UPS delivery drivers receive unique access credentials for each building on their route. Latch creates a traceable record every time a driver enters a building (sounds like an example of IoT). UPS will determine the potential savings from delivering multiple packages on the first attempt. This is a progressive step as traceability is hard to come by for local and regional carriers who cover the last-mile.

While it’s a step in the right direction, they’re not the only ones doing it. Latch is one among several companies that offer a smart last mile location network or smart lockers.  It’s a trend that’s spreading and it has its advantages:

  • The shipper saves money by turning a residential delivery into a commercial one (perhaps no more residential surcharge).
  • The carrier makes more money delivering more packages to one stop and avoid repeat attempts if someone isn’t home.
  • The customer wins because they can get their package at their convenience and don’t have to worry about theft.
  • The business hosting the locker drives more foot traffic to their business.

Though this provides some relief for UPS and the pains they experience with last-mile – as well as peace of mind for customers, it wouldn’t be shocking if UPS added a smart lock delivery fee to help meet their revenue goals. The data collected will show their time and money savings and guide their strategy on how to generate more revenue by adding another surcharge to your invoice.

Keep up with rate increases, new surcharges, policy updates, and more by following us on social media (LinkedIn, Twitter, Facebook). We proactively keep a pulse on UPS and FedEx and will communicate the latest news so you’re in the know and prepared to take action if necessary. And feel free to contact us if you have any questions or want insights tailored to your business.

Topics: Data Science, eCommerce Shipping, Surcharges, UPS
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