s we finally emerge from the turmoil of COVID-19, logistics has undergone a transformation into a network of trust and safety, while delivering fairer working conditions and environmental awareness. The old monolithic hub-and-spoke model, radiating out of automated distribution centers, has been replaced with a smarter, decentralized network of cloud-managed locations that can rapidly flex capacities between regions.
How COVID-19 Broke the System
When the western world entered shutdown in April 2020, demand rapidly outstripped existing delivery capacity. While sophisticated supply chains, designed for shock resilience, could return supply to previous levels within a week or two, delivery capacities could not keep up. The surge of demand for home deliveries exposed flaws in the existing system: deliveries required that drivers make human contact with recipients, while facing long hours under tight deadlines. Sickness and self-isolation slashed driver availability just as demand increased, and despite mass recruitment programs, adequate staffing became a significant issue. The gig economy, immobilized by legal and financial uncertainties, could no longer fill the gap. Furthermore, deliveries needed to be low-risk (i.e. contactless) and secure. The initial approach to drop deliveries on the doorstep proved unsustainable due to both security (especially for high-value, critical goods) and hygiene concerns.
COVID-19 has undercut existing practices, where workers were disposable, underpaid, and untrained. A new system—responsive enough to deal with fluctuations of demand, flexible enough to navigate social distancing and disease prevention guidelines, and secure enough to get high-value goods safely to recipients—was desperately needed.
Innovative Technology Optimized for Safety
The COVID-19 crisis required a new solution for the ‘final mile’ in logistics—drivers delivering from the distribution center to the final recipient. This solution involved extensive uptake of innovative app locker technology. While parts of the B2C (business-to-customer) sector had already built substantial capacities for such technologies (such as Amazon Lockers, DHL Packstations, and ParcelLock parcelboxes), it was the shutdown that triggered widespread adoption of the technology. Smart lockers—combining mailboxes with IOT technology and requiring only a smartphone app to operate—have come to penetrate public spaces and both B2C and B2B (business-to-business) transactions. The lockers’ success lies in their ability to allow transactions of all sizes to be made in either direction at any hour, while providing tracking and security and maintaining social distancing. As an intelligent, secure final mile solution that preserved both staff and recipients’ time and health, companies scrambled to create and join app locker systems.
Once sufficient flexible capacity in these systems became available, new supply chains were threaded through the locker networks. The built-in possibilities for ‘reverse logistics’ became essential in delivering thousands of privately 3D-printed components for PPE to hospitals and healthcare workers, as well as in collecting test kits, maintaining lab equipment, and distributing vaccines. The locker-based distribution networks’ capacity to handle reverse logistics has led to locker use for approximately 80% of transactions involving physical goods entering the supply chain, while the benefits of the technology have made it suitable for businesses as diverse as pharmacies, grocery chains, and energy companies.
Lockers are now visible at every gas station and row of shops, becoming as common as ATMs were before COVID-19. There is enough capacity that everyone either reserves lockers directly or uses the public locker network on a pay-as-you-go basis. Decentralized and intelligent inventory models now define best practice, and supply chain employees have become skilled workers, who flexibly adapt to changing requirements and undergo constant training.
The New Internet of Lockers
Like the web, the smart locker network is now sufficiently developed to allow free economic agents to build new service offerings by utilizing its spare capacity. Innovative technology allowing for reverse logistics will also become an essential key to unlocking crowdsourcing capacity for aid in future emergency situations. While we have already seen changes to the postal systems in many countries, we can expect further transformations as more adapt themselves to smart locker systems. The changes that have taken hold in western countries will extend from population centers into the periphery and will spill over into the developing world, where safe and secure—yet robust and flexible—methods of goods exchange will grant communities access to new markets.
For the environment, these changes will mean unlocking genuine efficiencies—not just reduced unit costs, but actually reduced emissions related to road mileage, traffic at peak hours, and hours spent traveling by recipients. For customers, the commonplace experience of receiving and sending items will take place at a new standard of security, transparency, and quality. And for logistics itself, these changes will continue to transform the industry into a sphere of continuous innovation, where efficiency is measured not only by volumes delivered but also in terms of human life and security.
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From Convenience to Lifeline: Technology Transforming the Logistics of Tomorrow
May 18, 2020
A
s we finally emerge from the turmoil of COVID-19, logistics has undergone a transformation into a network of trust and safety, while delivering fairer working conditions and environmental awareness. The old monolithic hub-and-spoke model, radiating out of automated distribution centers, has been replaced with a smarter, decentralized network of cloud-managed locations that can rapidly flex capacities between regions.
How COVID-19 Broke the System
When the western world entered shutdown in April 2020, demand rapidly outstripped existing delivery capacity. While sophisticated supply chains, designed for shock resilience, could return supply to previous levels within a week or two, delivery capacities could not keep up. The surge of demand for home deliveries exposed flaws in the existing system: deliveries required that drivers make human contact with recipients, while facing long hours under tight deadlines. Sickness and self-isolation slashed driver availability just as demand increased, and despite mass recruitment programs, adequate staffing became a significant issue. The gig economy, immobilized by legal and financial uncertainties, could no longer fill the gap. Furthermore, deliveries needed to be low-risk (i.e. contactless) and secure. The initial approach to drop deliveries on the doorstep proved unsustainable due to both security (especially for high-value, critical goods) and hygiene concerns.
COVID-19 has undercut existing practices, where workers were disposable, underpaid, and untrained. A new system—responsive enough to deal with fluctuations of demand, flexible enough to navigate social distancing and disease prevention guidelines, and secure enough to get high-value goods safely to recipients—was desperately needed.
Innovative Technology Optimized for Safety
The COVID-19 crisis required a new solution for the ‘final mile’ in logistics—drivers delivering from the distribution center to the final recipient. This solution involved extensive uptake of innovative app locker technology. While parts of the B2C (business-to-customer) sector had already built substantial capacities for such technologies (such as Amazon Lockers, DHL Packstations, and ParcelLock parcelboxes), it was the shutdown that triggered widespread adoption of the technology. Smart lockers—combining mailboxes with IOT technology and requiring only a smartphone app to operate—have come to penetrate public spaces and both B2C and B2B (business-to-business) transactions. The lockers’ success lies in their ability to allow transactions of all sizes to be made in either direction at any hour, while providing tracking and security and maintaining social distancing. As an intelligent, secure final mile solution that preserved both staff and recipients’ time and health, companies scrambled to create and join app locker systems.
Once sufficient flexible capacity in these systems became available, new supply chains were threaded through the locker networks. The built-in possibilities for ‘reverse logistics’ became essential in delivering thousands of privately 3D-printed components for PPE to hospitals and healthcare workers, as well as in collecting test kits, maintaining lab equipment, and distributing vaccines. The locker-based distribution networks’ capacity to handle reverse logistics has led to locker use for approximately 80% of transactions involving physical goods entering the supply chain, while the benefits of the technology have made it suitable for businesses as diverse as pharmacies, grocery chains, and energy companies.
Lockers are now visible at every gas station and row of shops, becoming as common as ATMs were before COVID-19. There is enough capacity that everyone either reserves lockers directly or uses the public locker network on a pay-as-you-go basis. Decentralized and intelligent inventory models now define best practice, and supply chain employees have become skilled workers, who flexibly adapt to changing requirements and undergo constant training.
The New Internet of Lockers
Like the web, the smart locker network is now sufficiently developed to allow free economic agents to build new service offerings by utilizing its spare capacity. Innovative technology allowing for reverse logistics will also become an essential key to unlocking crowdsourcing capacity for aid in future emergency situations. While we have already seen changes to the postal systems in many countries, we can expect further transformations as more adapt themselves to smart locker systems. The changes that have taken hold in western countries will extend from population centers into the periphery and will spill over into the developing world, where safe and secure—yet robust and flexible—methods of goods exchange will grant communities access to new markets.
For the environment, these changes will mean unlocking genuine efficiencies—not just reduced unit costs, but actually reduced emissions related to road mileage, traffic at peak hours, and hours spent traveling by recipients. For customers, the commonplace experience of receiving and sending items will take place at a new standard of security, transparency, and quality. And for logistics itself, these changes will continue to transform the industry into a sphere of continuous innovation, where efficiency is measured not only by volumes delivered but also in terms of human life and security.
