For parcel services, the share of total costs for the last mile is up to 60%. With the increasing parcel volumes, this presents many CEP service providers with ecological and economic challenges, which have to be overcome in addition to the high customer requirements. 7Days offers customized solutions along the entire value chain.
Increasing demand in online retail leads to exponential growth in parcel volumes
The shopping behavior of customers has changed significantly over the past few years. The classic supply chain, from the producer to the retailer to the end customer, has undergone some major changes due to the shift to e‑commerce. Retail supply has lost some of its relevance. In traditional retail supply, stores are supplied with goods, usually in large quantities, by selected partners. These can be efficiently organized and handled in large capacities. Due to the usual high number of transported goods, the transport costs per unit can be kept very low.
Online retailing has abruptly changed the cost structure. Parcel deliveries in Switzerland, among other countries, have experienced enormous growth in the last decade. For example, Swiss Post will deliver around 194 million parcels in 2022, almost twice as many as in 2010 (just under 110 million parcels delivered). Online commerce offers companies and retailers new ways to sell their products. Companies have to decide which distribution channels they want to use to sell their products and merchandise. One of the questions to be answered is whether to go through an intermediary or deliver directly to the end customer. Direct distribution, drop-shipping or multi-channel distribution are models which have gained popularity and attractiveness through online retailing. Companies and producers are focusing on high flexibility and efficiency in the supply chain. The fragmentation of the flow of goods to different distribution channels as well as the associated lower number of parcels per recipient result in a significantly higher time and cost per item. In some cases, the transport costs for the retailer are not in proportion to the value of the goods. This is particularly important in view of the fact that any returns must also be taken into account.
Powerful and multi-layered service portfolio
As a logistics service provider with a focus on the CEP sector, 7Days recognized the new dynamics early on. While great strides have been made in technology and logistics, managing this “last mile” is still a significant challenge. Digitization can be used to optimize this delivery method (for example, by dynamizing routes ), but this only partially solves the core problem. Early in the process, the levers must be set correctly, i.e. the processes upstream of the transport must be geared to optimized delivery. To achieve this goal, 7Days takes a holistic approach and considers all processes along the value chain to optimally align them with delivery.
7Days offers producers and retailers customized solutions for a wide range of distribution models early on in the supply chain. Cross-border pre-collections as well as storage solutions incl. Customs clearance services represent a first logistic stage of the supply chain. Geographically centralized storage of goods at 7Days’ main distribution center to further optimize delivery and throughput times in the context of delivering goods to recipients is also conceivable. In order to ideally design the delivery process in the last mile, to bundle and deploy resources in the best possible way and to make optimum use of capacities, an intelligent and efficient cross-docking process is required to aggregate, consolidate and feed in all flows of goods and information in the hub and spoke structure of 7Days for nationwide delivery with the shortest possible throughput times. This not only creates competitive advantages for customers, but also offers a more sustainable solution from an ecological as well as economic perspective.
In addition to forward processes, the scope of services provided by 7Days also includes the repatriation of goods throughout Switzerland, which enjoys a supporting function particularly in connection with online trade. It is no longer a secret that returns in online retailing can make the difference between success and failure in e‑commerce. In addition to the transport costs for the delivery of goods, the processing of returns is increasingly becoming the focus of process optimization. In addition to the classic returns, 7Days also takes care of the return of empty containers and, if required, the compliant disposal of empties.
Innovative solutions and technologies
Last mile logistics remains a challenge along the supply chain. However, fulfillment service providers, such as 7Days, have proven in recent years that with innovative concepts and solutions, such as direct delivery of spare parts to service vehicles or nationwide Päckli point net for the delivery of returns, a considerable added value can be created along the supply chain with an optimally coordinated product mix. Electrification of delivery vehicles, especially in agglomerations and cities, is another step toward making the last mile more environmentally friendly. Businesses, governments and technology providers need to work closely together to develop and economically implement sustainable and efficient solutions. The needs of customers should always be in focus, because an optimized last mile is the key to a successful future for e‑commerce and parcel delivery.
