Parcel delivery volumes are increasing with the rise in e-commerce. So delivery services need to meet customer expectations.
But there is a paradox here.
Customers increasingly expect delivery prices to remain low and that home delivery should be cheaper, or even free.
They also expect good communication and on-time deliveries – despite rising orders.
Pick up drop off (PUDO) is a solution. It gives the customer more choice and control while relieving the pressure on last mile delivery.
But it has to be done right. Here, we look at the opportunities and challenges of PUDO, including:
- What does PUDO solve?
- Network problems – giving people access to a PUDO point.
- Technology – how technology can make it work better.
How driver shortage can boost PUDO
Driver shortages are becoming more and more of an issue for delivery companies. At the same time, parcel numbers are increasing year-on-year.
It means that many drivers may have to work longer hours. It may even cause some to quit.
Driver shortages are not the only issue. Delivery companies also have to invest considerable sums on onboarding because of driver churn.
- Driver shortages will remain a problem.
- Onboarding will be important, especially for bringing in flexible workers.
- Parcel deliveries are increasing year-on-year – but are unpredictable in the short-term.
PUDO can ease driver shortages by reducing the number of home deliveries.
Offloading to PUDO points and lockers is – and will continue to be – a crucial way to solve capacity issues.
PUDO – a flexible approach to cut last mile delivery costs
The e-commerce boom is great for retailers. But last mile delivery costs of around 53% are affecting profitability.
Delivery businesses need the ability to scale up at speed, operate with efficiency, while still controlling costs.
But this typically means more drivers, more devices, more vans and more costs. Here is where PUDO offers a solution.
- Last mile delivery costs can be cut significantly and are no longer impacting profitability.
- Delivery businesses can use PUDO points to scale up delivery capacity.
- Streamlining of delivery processes like receiving, parcel handover to recipients, returns handling and shipment tracking can be improved
A Win-Win for customers and carriers
PUDO is a win-win for customers and carriers.
It not only gives customers choice, certainty and security for picking up or sending a parcel. It also helps carrier to cut cost and eases capacity problems for delivery companies following the COVID-19-fueled uptick in e-commerce.
And there will be even more need for PUDO as workers return to the office.
There are still some issues that need to be fixed before it becomes truly mainstream.
Network and network density improvement
A PUDO network needs to comprise locations where all customers can pick up or drop off their packages without traveling too far.
Typically, locations include post offices, retail stores, restaurants, gas stations, hotels, and other businesses.
Customers need to have a PUDO point within a reasonable distance for the concept to work.
The Last Mile Experts cited a rule of 1 point per 10,000 people. It stated: “This is not an optimal network but represents the minimum density that has any chance of success.”
It also said parcel volumes in Europe would reach 20 billion pieces in 2025. However, there is a vast disparity in the network density across the region.
On one side, there is Finland, which is the only EU country that has over 20 delivery points per 10,000 inhabitants.
But on the other side, there are only 5 out of 28 countries which have 10 delivery points per 10,000 inhabitants.
To summarize, a successful PUDO network should have:
- PUDO points which are within reach.
- 1 point per 10,000 people.
- No wide disparity in PUDO access point density exists between countries and regions.
Technology is the way forward
In conclusion, it is essential to understand that there are no quick solutions to some of these problems.
However, we believe technology can play a major role in alleviating them. It can do this by speeding up processes and making PUDO employees’ and drivers’ jobs easier.
Scandit’s Smart Data Capture platform is ideally suited for this task.
We can enable everyday smart devices to handle a range of tasks. These include scanning multiple barcodes at once and overlaying the results on the screen with AR.
Better still – this can work on just about any smartphone. So you can run a Bring Your Own Device (BYOD) strategy with confidence.
If you want to learn how to improve your strategy, see our free guide ‘Why PUDO Is Taking Off and What You Need to Know About It’.