There is a concept of last mile in logistics – it is the last part of the road, such as a closure or leak, for example, from the sorting plant or distribution center to the buyer’s door. And this last fragment is the biggest problem for suppliers – courier companies and creates a large part of the costs. Reaching the recipient’s address can be difficult for a variety of reasons.
Therefore, a network of parcel collection (and dispatch) points, the so-called PUDO (Pick-Up Drop-Off), as well as packing machines. This is true all over the world, as online sales are growing everywhere. And delivery to stations or vending machines solves many problems. But this is not a game in itself. In order for people to want to use them, such networks must meet certain conditions.
Sawek Szymaski: What is the biggest problem of the so-called last mile?
Marek Rycki: If he asks the manager of a company like Amazon, Alibaba or Allegro what the biggest problem is for them, we will always hear about the effectiveness (capacity) of the network. An e-commerce store that cannot deliver goods to consumers is like an ordinary store with its doors closed. The worst thing possible.
If so, it is better to use vending machines or pick-up points than to drive on people. What is the most effective solution today?
– The door-to-door courier must first go to the buyer. If he’s lucky, the address makes sense, but it could also be a large property with very vague numbers. This is for the parking problem. If he is lucky, he is confronted with a broken intercom or a tall building with a broken elevator. And the worst thing is that this buyer may not be at home.
However, it looks a bit like a B2B delivery with a packing machine or PUDO point.
The courier knows the location, it’s easy to get there, it’s available 24 hours a day – by car or from morning to evening – if it’s PUDO. And most importantly: practically 100 percent. parcels are delivered on time.
And more at the same time?
– A courier can deliver in a big city – this is a real example – up to 1300 parcels a day, and 850 parcels a day. The door-to-door model will be delivered by the world’s best courier in two days. 150 and 200 parcels. This is the answer to the question of why all the major e-commerce companies choose the so-called out-of-home delivery, ie vending machines or PUDO.
I would like to add that these environmental issues are on the agenda. About 60-70 percent of cars in the city. less fuel is burned, and outside the city it can be up to 90 percent. That is why more and more cities in the West today say: we do not want eight courier cars to be eaten in the same neighborhood, as a result of single parcels. We prefer a slot machine for everyone.
There is a prosaic problem that machine guns need a certain place, and such a place must meet certain conditions. Does such a system have bandwidth limits?
– We do not know yet, because no country has such a large number of such devices. Most packing machines are currently in China, according to our estimates, about 450,000, and now maybe more. But it is a huge country.
But the main question for me is different: how many operators can there be? The largest network is connected with us. Today it is only for InPost, ie DPD, DHL, UPS, GLS cannot use it. And when everyone starts building their own cars, the problem will arise. It is inefficient, very attractive and not unnecessary. The whole point of vending machines is that most packages end in one machine, not three or four. Therefore, sooner or later, city operators will encourage cooperation.
Is it possible to manage this infrastructure as a local self-government body or perhaps as an institution?
– Different models. For example, in Singapore, you have actually opened your vending machine, which is available to all operators. A similar city was established in Salzburg. I think that in Poland, local governments will try to control the number and use of more cars, but they will be managed directly by a commercial operator that serves different carriers.
How is Poland compared to Western countries in terms of the number of slot machines?
– And there is an interest here: it turns out that Poland has the most such machines in Europe, probably 20,000. In this regard, the next market is Germany, but there are twice as many devices as in our country. Even the United Kingdom, perhaps the most developed e-commerce market in Europe today, lags far behind Poland. In general, when it comes to PUDO machines and points, Poland is one of the most advanced countries not only in Europe but also in the world.
Where does it come from?
– We were one of the first and Rafa Brzoska – the founder of InPost – was able to get capital to create such self-service machines. And they are not cheap devices. And such a network must be tight enough for the machine to exist at a slipper distance. The second reason is that Allegro prefers a subscription model. For this to work, they needed an efficient and cheap delivery method. Initially, pick-up was only possible through PUDO and lockers.
This distant shoe intrigued me. What are we talking about?
– As for the number of machines, as in PUDO, it is necessary to exceed a certain critical limit. The Belgian Post Office has come up with a cool slogan: “Slipper distance”, ie the distance a car or pick-up point should be enough to get it with slippers. is far away. Everywhere I go, 350 meters from the house, it looks like a place along the way. It’s like door-to-door delivery. In particular, the main advantage of automatic machines is that it is very easy to get back there, and here the rollers are “slipper distance”.
Are vending machines and pickups competing models?
– No, they must be good. The optimal system needs both such devices and PUDO. In any case, the car is a piece of metal, which can not be extended when there is more load on the network, for example, before Christmas. At PUDO, you can always agree with the owner, for example, 200 parcels instead of 100 parcels in a few basic weeks. Secondly, opening such points is very simple and cheap. All you need is basic training, software, a door sticker and a new PUDO. The car is open 24 hours a day, but there are also people who prefer human interaction. Simply put, both forms of perception play a slightly different role. Of course, PUDO is not a worse version of the car. Moreover, both solutions are weaker when used separately.