Growth in parcel volumes forces courier services to implement innovations. In 2018, the last mile delivery, where parcels are delivered to a particular recipient by ordinary people rather than couriers, gained popularity.

The service relies on the same operating principle as that of Uber or AirBnb where ordinary people who have time or their own apartment offer the service. The courier service delivers large quantities of consignments to a single location and subsequently registered users deliver them the last kilometre/mile to specific addressees.

The last mile delivery is fantastic. I can say this because our company started putting it into practice in Lithuania three years ago and were among the first in the world to implement it. We started playing with the idea in 2012 together with Megodata, our strategic partner.

Internet development has made a major impact on the work of courier services. Online retail sales have grown dramatically over the past ten years and the number of Lithuanian online shoppers increased almost threefold – from 14% to 47%. These are Lithuanians who shop online at least once a year.

In the EU, an average of 55–60% of the population shop online, so we still expect growth and therefore need solutions to deliver the goods to customers as soon as possible.

We can see that statistically the last stage of delivery of the consignments – delivery to homes – takes most time, because a courier must find the recipient of the consignment at home at a specific time or to go to another place where the recipient is.

With the help of artificial intelligence and our analysis we realised that one of the solutions is to increase the number of couriers, however we or other courier services cannot support an army of staff. We therefore started analysing the case of Uber and how the quality and price of taxi services have changed with its arrival to the cities. The increase in the number of such employees as those working for Uber encourages users to use more services, specifically the taxi services.

In 2016, we launched a new service – VENIPAK DRIVE.  Within just a few weeks about a thousand people registered on our system willing to become temporary couriers – to deliver parcels on their way home or traveling from one place to another. This decision has proven itself, because the delivery times of the consignments have improved.

 

Drones and robots are not a solution

People sceptical about the last-mile principle say that such delivery will never take off, because companies will deliver consignments using drones or robots. I do not think that this will become a reality, at least in Lithuania or in its major cities, in the next twenty years.

Vilnius, Warsaw, London and other European cities are densely populated making deliveries of consignments using drones simply impossible, no matter how advanced and accurate the technology would be. I agree that deliveries to customers who live in private homes could be possible, but then this service would become very expensive, more like the icing on the cake, a promotional stunt rather than a real solution.

Robots delivering consignments do not offer a solution either for various reasons – it is complicated to build an efficiently moving robot adapted to different buildings and staircases and the production price of one such robot will be in excess of the salaries paid to all the last mile employees.

Technologies, innovation and artificial intelligence are extremely crucial factors in today’s business, but we cannot eliminate the human factor. This is a concrete case where with the help of artificial intelligence, a new service and business model is created which is implemented by ordinary people.

 

Justas Šablinskas

VENIPAK CEO