E-commerce is continuing its strong performance in 2021, but the companies responsible for getting those packages to consumer doorsteps continue to be plagued by challenges, including a lack of drivers.
The Bureau of Labor Statistics said courier jobs climbed to 1,006,400 on a seasonal basis in August, up 8,100 jobs from a month earlier, but according to a new survey, that rise is not enough to ease concerns.
Scandit, a technology platform company offering solutions for retailers and their shippers, in the spring surveyed 118 stakeholders in the postal, parcel and logistics sector across 23 countries and found that in North America, 37.8% of last-mile delivery firms said finding qualified drivers to hire is their biggest issue. That far outpaced the No. 2 concern, which was reducing last-mile process inefficiencies, cited by 24.4% of respondents.
An additional 22.2% of respondents said increasing capacity to match demand is their biggest concern. Only 11.1% were concerned about lowering costs, and just 2.2% said providing new services to customers was their main issue.
Labor dynamics stress supply chain
“The labor dynamics for the transportation and logistics sector have been especially strained by the increased pressures and demand caused by both COVID-19 and the growth in popularity of e-commerce and omnichannel fulfilment models,” said Pat Nolan, senior research analyst at VDC Research, which conducted the survey on behalf of Scandit. “This means last-mile organizations are competing for a tighter labor pool that they must win over with, among other things, effective mobile tools that enable them to do their jobs more productively and smoothly.”
The report, “Is Your Last Mile Technology Fit for Purpose,” found difficulty in finding drivers was more acute at larger fleets (more than 10,000 employees), with 47.4% ranking it first while just 33.3% of smaller fleets said so. Conversely, capacity concerns were less worrisome for the larger fleets, with just 15.8% saying it was their top concern compared to 22.2% of smaller fleets.
The survey covered seven of the 10 largest last-mile and courier providers globally.
Scandit posited that one benefit larger fleets have is the use of mobile devices. Larger fleets were more likely to deploy mobile devices (92.9%) to their full-time workforce compared to smaller fleets (64.7%). They also tended to dedicate 53.6% of their employees to supporting last-mile delivery compared to just 45.2% of smaller fleets’ workforce dedicated to that important segment.
“While capacity is a concern, respondents from larger organizations may feel that addressing driver shortages and eliminating inefficiencies from last mile delivery will create the capacity they need to handle the e-commerce boom,” the report said.
Smartphones become the tool of choice
The use of smartphones and other mobile devices is growing, with 53.9% using smartphones with mobile apps and 46.1% using dedicated scanning devices. In Europe, the numbers were 34.2% and 31.6%, respectively, with an additional 32.9% saying they used both.
“Across both North America and Europe smartphones are most often the primary device of choice, displacing legacy scanning devices in the hands of last mile delivery employees,” the report said. “When it comes to smartphone consideration and implementation, the two regions’ fleets currently have a similar makeup in terms of their deployments of dedicated devices and smartphones.”
Scandit also asked respondents who switched to smartphones why they did so. The top three reasons cited across all regions were the ability to quickly add new features and capabilities (48.4%), lower total cost of ownership (41.9%), and improved user experience and efficiency (37.1%). In North America, 84.6% cited improved user experience and efficiency, and 53.8% said it was to switch to using a single device.
“This focus on employee satisfaction is potentially linked to the makeup of the workforce with a high proportion of permanent staff,” the report said, noting that 75% of respondent businesses used mostly full-time (51.1%) or only full-time (24.4%) employees. “When combined with the biggest challenge of finding qualified drivers (37.8%), it’s likely that boosting employee satisfaction and reducing churn plays a role in the focus on improving the UX and eliminating the need to carry multiple devices.”
Nearly half of companies (48.9%) still using dedicated scanners said they are open to switching to smartphones.
“The pandemic has made the need to be able to scale up delivery capacity and put more drivers on the road to meet the increased volume even more acute,” said Samuel Mueller, CEO of Scandit. “With an intuitive, computer-vision-enabled app that can be quickly downloaded onto a smartphone, drivers benefit from having a range of features at their fingertips that allow them to manage their workflow more comfortably all from one device. Getting it right the first time for the end customer also helps avoid the additional costs and inefficiencies involved in making multiple delivery attempts.
“As we move beyond the pandemic, e-commerce is likely to stay a dominant feature of last mile delivery,” he added. “The technology investment decisions that companies make now will give them a decisive advantage over the competition in being able to seamlessly onboard new recruits, scale and adapt quickly to peaks in demand.”