Mastering the Last Mile Delivery Experience

Hello, and welcome to mastering the last mile delivery experience! My name is Doug Haebig. I'm the product owner for large format home delivery at C.H. Robinson. I've been part of the Robinson team for 2.5 years. Prior to coming to Robinson, I spent nearly 14 years working for Target Corporation in Minneapolis. During the first half of my career, at target, I held roles and analytics, project management and network planning. I finished my time at Target, leading the Ecommerce transportation team, where our focus was large format and parcel shipment home delivery. My role in CH. Robinson has been to accelerate the growth off a large format home delivery product and ensure complements the suite of other Ecommerce products that C.H. Robinson offers.

The body of my talk today revolves around heightened consumer delivery expectations, the challenges shippers face as they plan and execute last mile deliveries and tools and tactics that could be employed to ensure a positive delivery experience. We have witnessed unprecedented events in 2020. Downstream effects from Covid have stressed truckload capacity. Parcel capacity has been running at retail peak season levels since Q2 and Ecommerce to share retail is bigger than ever before. It's anyone's guess when or if things will return to pre-Covid patterns. But it's my opinion that the tactics that we'll discuss today are going to be viable in the long run.

Plain and simple—consumers have high expectations for home deliveries, regardless of product, shipper or mode. The frequently referenced, vendiagram representing "fast, cheap, or good—Pick Two." doesn't cut it in last mile space anymore. Consumers expect what was previously impossible with two day, next day in same day shipping options, Speed is the new norm. Speed is one of a series of critical enablers that allows us as busy consumers to decide where to spend our time. If we can wait a few hours or days for something, we can now spend more time on zoom calls, visiting with family, exercising or knocking out house projects; rather than making that trip to the store.

Right up there with speed, there's reliability. Without it—speed, doesn't net much. Surveys from consumers across the globe, note that reliability contributes more to a positive experience than speed does. In other words, disappointment is greater when a high expectations aren't met. Free shipping or shipping costs included is now a common expectation. Consumers reel when they see high shipping charges, especially when they have choices. What the large formats face, is one of the few remaining holdouts where consumers air commonly responsible for some or all of the delivery costs. Consumers demand transparent, accessible, and timely communication. A recent study showed that nearly 80% of consumers considered important to receive delivery progress updates. There's a fine line between over communicating, under communicating, and the level of detail that is shared with consumers. Preferences and behaviors vary wildly here. Some consumers are very proactive and will scrutinize every part of the shipments journey, checking tracking multiple times per day until that delivery is complete. While others are more passive and are happy to have updates pushed to them. The latter will typically only check when things feel like they're taking too long. It's important to note that speed, reliability, costs, and transparency, are the variables we can influence that ultimately drive convenience and value for shippers and consumers.

The last mile is a challenging, competitive arena for all participants, as there are many obstacles that must be navigated to ensure a positive delivery experience. A portion of these obstacles are due to general inconsistencies that we find across geographies. In the US, there are thousands of delivery providers using dozens of technology platforms that service thousands of retailers who are also using their own unique technology stacks! Combine consistency with increasingly diverse delivery service levels, aggressive performance management, and complex distribution and fulfillment models; and you have a mind numbing combination of requirements that must be supported. What all of this adds up to is: confused and overloaded customer support, poor consumer experience, higher logistics costs and, ultimately, overwhelmed teams. Teams that were built to handle a much simpler delivery environment just don't have the tools to keep up with scale, complexity and especially customer expectations. Providing more options means expanding complex logistics networks to include more vendors, distribution centers, delivery modes, fulfillment options, partners, carriers and returns. Enabling transparency and control means managing a mind numbing stack of technologies and software needed to track all the physical and digital transactions and events. Dealing with increasing scale and influence means shipping problems now extend beyond logistics and into customer support, marketing, sales and customer care. We've seen first hand how retail professionals get stuck in reactive mode: patching together inefficient work flows, using frantic email threads, sharing information via error prone and outdated spreadsheets, and working late nights to deliver very basic reports. To put it plainly, everyone is working really hard, but without the right tools, they can barely maintain the status quo as as expectations and complexity continue to rise.

While there isn't a one size fits all approach that addresses all obstacles, I recommend deploying resources is to address five key success factors: end-to-end visibility, exception management, supplier performance management, a rock solid returns and OS&D strategy, and point of sale (POS) delivery, scheduling. End-to-end visibility, exception management supplier performance management, and a solid return strategy are foundational competencies. While point of sale delivery scheduling is currently somewhat aspirational due to the complexity and variability of all the technology integrations that it requires. Let's explore these factors in more detail.

End-to-end visibility is the ability to provide pertinent location information for any given order, irrespective of provider or mode. Furthermore, this information must be shaped to fit the intended audience. As an example, consumers typically desire less detail than a customer service representative or supply chain analyst. Though none of the successfactors we're going to go through our easy, end-to-end visibility is particularly difficult. And this difficulty stems from the dynamic delivery provider base and freight management and routing technologies that must be integrated and constantly maintained. Exception Management is the ability to use shipment location data, customer service level agreement, and thresholds to proactively spot problems before they occur. The outputs, similar to end-to-end visibility, must be tailored for the intended user. As an example, a consumer delivery delay alert will primarily be informational, while customer service team member will need specific direction to take action. Done effectively, this is an immensely important lever to manage costs to serve as well as spikes in demand because it allows teams to prioritize work and be proactive. Supplier performance management leverages shipment location, data volume thresholds and shipper forecast to proactively identify capacity or performance issues. These insights allow freight to be throttled or alternatively routed to avoid large backlogs and ensure maximum control of total order cycle time. A Rock Solid returns and OS&D strategy incorporates a curated supplier base, well defined returned service level agreements, and active OS and D management. This will look different for each shipper, but the outcome should be fast and easy for consumers. Returns have typically been classified as lower priority for shippers, but studies have shown that frictionless returns are a top five conversion driver with consumers in the US. Intelligent post consumer returns management, such as open box retail platforms, or liquidation programs, are critical to help maximize yield and minimize expense in this space. Lastly, point of sale (POS) delivery scheduling is a challenging outcome that requires deep coordination and well designed technology across supply chain partners. Available delivery slots by ZIP code and provider must be captured and intelligently made available for shippers to suggest to consumers and check out. Point of sale delivery scheduling drives consumer confidence in conversion. It's uncommon in the large format space, and it does lack accuracy where it is found. I've included this is a success factor because it's a true North, and it's my hope that it keeps us all thinking about solving high value problems for our consumers.

These five success factors need to be thoughtfully integrated and orchestrated to produce a positive and consistent outcome. They must also be manageable for the teams operating these complex supply chains. Or we can end up where we started—with overwhelmed teams.

Over the last two years, C.H. Robinson has invested internally and partnered externally with industry leaders in the connectivity and consumer visibility space. In fact, we're in the process of deploying and enhanced multimodal shipment visibility experience, parts of which have already launched for our customers. We're rolling out this new experience in four waves, each wave adding incremental value for our customers. Wave one is dedicated to expanding carrier connectivity. The purpose of this wave is to develop a fast, scalable and low friction process, to onboard delivery partners and capture rich status information from them. This is critically important due to the number of delivery partners we leverage, and the variety of technologies employed by these partners. Wave two focuses is on the creation of a consumer centric tracking experience that is engaging and offers curated shipment statuses; SMS delivery alerts and the ability for shippers to brand the experience for their guests. We expect this new experience to reduce costs for our shippers as it will take some of the burden off the customer care teams through reduced "Where's my order?" inquiries. Wave three includes the implementation of an exception management platform aimed at compressing order to delivery and exception resolution cycle times. This platform connects shippers, consumers and carriers and enables real-time collaboration to address supply chain issues. The last wave of enhancements consists of an online analytics module that enables customers to access detailed order data and deep dive key operational and customer service metrics. In addition to our end-to-end visibility investments, our team of supply chain experts have invested countless hours to develop a rules engine that leverages the power of Navisphere that optimize on time performance and proactively identifies supply chain delays in bottlenecks. We also offer solutions across all miles that scale to handle unplanned shipments; and we have the flexibility to build smart solutions customized to your needs. C.H. Robinson is truly in a unique position to support the needs of shippers in the last mile space.

Okay, I would like to briefly reiterate the key takeaways from this talk. Consumer expectations will continue to change. Be sure to develop a supply chain strategy that gives you flexibility to adapt. Visibility is foundational. It facilitates proactive exception management and enables effective carrier performance management. Develop a strong returns and OS&D strategy. With an eye towards point of sale delivery scheduling and other features that drive conversion and build consumer confidence.

Our global suite of services is unparalleled in our industry. With C. H. Robinson customers can work with a provider that has the scale and expertise to solve the greatest logistics challenges and grow their business. Our technology, built by and for supply chain experts, provides tailored solutions that work for supply chain professionals and drive supply chain outcomes. Our single global multimodal transportation management system, Navisphere, connects our entire network of 200,000 companies to provide customers with greater supply chain efficiency, real-time insights and visibility. We have the most data on shipments, routings and carriers in the world. This information advantage helps us drive better outcomes for our customers, including improved savings, reliability, and visibility. We're already solving the most complex logistics problems for leading companies such as Microsoft, New Era, in Anheuser Busch, among others. We have a global network of experts who acted as an extension of our customers teams. Our people are unequaled in this industry. They are known as the people that you can rely on. And that's why we have greater than 99% customer retention among our top 500 customers.

I would be thrilled to hear your feedback and answer any questions you have. Here are a few ways to reach me. [To learn more visit] Thank you for taking the time to listen and do this talk. I hope you have a safe and successful finale to 2020 and beyond.

Mastering last mile challenges in a competitive arena

Heightened consumer expectations can bring obstacles for supply chains in many industries. For last mile supply chains, especially those of large format items like appliances or home fitness equipment, the change in expectations continues to put pressure on shippers to deliver quickly and reliably with free or low-cost shipping options. Learn which success factors matter most in last mile shipping.

Explore our last mile freight service solutions.