I interviewed Charles Brewer who discussed Last Mile Delivery.
Can you first provide a brief background of yourself?
Absolutely, Dustin, and it's my pleasure. My name's Charles Brewer, and I spent the last 32-33 years directly or indirectly involved in supply chain and more directly than not, and have worked across every region in the world, which has been a fantastic journey. But my latest venture, having left DHL about six months ago, is focused purely on ecommerce and last mile delivery, which I think, to be very honest, is a hugely exciting area.
Everywhere you go, anything you read, anything you look up online is talking about how to crack that code, how to sort out that last mile delivery piece. So, we're really focused on cracking that code, and we're doing it in possibly the most difficult region in the world, which is Africa, which has abstract challenges across all supply chain areas, but even more so from a last mile perspective.
So, it's really exciting. Great fun. Personally, I think if we get it right, it's the pot of gold at the end of the rainbow from an ecommerce perspective. So, just started but very, very exciting.
Can you talk about what's involved and what it is?
Yeah. Sure. I think most of your listeners and readers and yourself will be very familiar with the explosion that is the ecommerce world and has been for the last three to five to ten years. I think, in particular, the last 12-24 months it's been gathering pace. In fact, I read a great article just yesterday I think it was that said the US retail environment would have gone backwards were it not for the ecommerce growth they experienced, particularly in Q4 last year.
Ecommerce is where it's at. More and more and more, our traditional consumers and customers are no longer going to bricks and mortar malls and doing things more and more online. We have two divisions under the MaraSokoni umbrella. One is very much focused on the online shopping space, so we're building an online shopping platform, much in the same way as you would go on to Alibaba or Rakuten or Amazon or whoever else.
So, Mara Shopping will go live in Nigeria later this year. And we didn't want to stop there. We said, that's one-half or two-thirds or one-third of the magic bubble, but the real clever stuff is how you get the online shopping item delivered. So, we then said let's have a separate business unit which is called Mara Xpress, which focuses very much on the last mile delivery, so how to get the goods from merchant to the customer. Which, in itself – as I said, having spent the last 32-33 years in supply chain – it sounds fairly easy. But it really is where the rubber hits the road.
If you look at any research that's out there, any report you pick up, it'll tell you the same thing, that customers, for the most part, are really unhappy with the level of service, the level of choice, the level of visibility, the cost, the speed, the predictive nature of delivery. They're just generally unhappy.
In fact, I read a statistic – I think this was two or three weeks ago now – from a European survey that was conducted across thousands of consumers. 80% of consumers said they were either dissatisfied or very dissatisfied with their last mile delivery, which is just staggering. Eight out of ten customers say they're not happy with the service they get from their logistics provider across last mile.
To the point, Dustin, we're launching a shopping platform, and we have already launched our last mile delivery service in Dubai. In fact, where I'm calling you from today is in the UAE. So we've started here, and very unsurprisingly, we started with zero shipments. And every day, we set a new record in terms of volume.
It's really a great example of the old adage: If you build it, they will come. So, that's what I'm doing. If you like, I can talk to you a bit about some of the secret sauce that we're applying in last mile delivery.
Yes, can you talk more about that?
Sure. If you look at global ecommerce statistics, something like 94% of all deliveries globally – and it's a huge market, as you would appreciate – are still being delivered through very traditional methods, which is the courier. A man or a girl in a van, and off they go in the morning with their 30 to 100 deliveries, and they try and make a delivery. The problem with that is there are two fundamental problems. One is you can only get a courier to a certain level of efficiency. So, it's very, very hard to make a margin just pushing the same volume through the same process. So, that's problem number one. From the supplier perspective, it's hard to actually make a profit.
But the other problem – and probably for more acutely related to the 80% of customer who are dissatisfied, and I'm sure you've probably have ordered online, Dustin – if you ever sat at home waiting for a courier to arrive, you wait and you wait and you wait and you wait, and then around about 3 o'clock in the afternoon you call the call center, who hopefully just about speaks English. And the call center agent says, "Yeah, the courier is really busy, but we did you he'd be there at some point between nine and six PM today, so just wait."
So, you go back to waiting and not doing all the things you should be doing. One of three things happens. Either the courier turns up, which is great, with your emotionally-bought shipment; or you pop out for five minutes to go and buy that milk, pick the kids up from school, go and play rugby or football or have a customer meeting, whatever it may be, and you miss the courier in those 10 minutes that you pop out. And you get that horrible sticker left on your door.
Or the third thing is you keep ringing and call center, who eventually tells you that the courier has just had a really bad day, and it will have to be delivered tomorrow. And you go through to same exercise the following day.
So, anybody who has ordered online can completely appreciate why eight out of 10 customers are really dissatisfied with that approach. And 94% of volume globally is going through that approach.
We come at it slightly differently. Again, you can see this in the press, but more and more, ecommerce or last mile delivery companies are seeing this as the right way to go. We're saying, "Okay. Look. The real key to this is to give the consumer choice." Let them decide how, when, and where they receive their phone, their pen, their shirt, their CD, whatever they've ordered. How do they let them decide, give them the power of decision as to when to have it?
So, we're coming at the last mile piece a little bit differently. First and foremost, we're really narrowing that delivery window. Rather than saying, "It'll be delivered tomorrow between 9 and 6. We're saying maximum three-hour window, which in many parts of the world would be challenging in itself. But in Africa and the Middle East, it's even more so. But anyway, narrowing that delivery window, so at least you can predict or pick the timeslot you want.
Secondly and thirdly, and possibly far more importantly, we're looking at alternative delivery methods. We're really motivating and ramping up the number of deliveries that go through lockers. So, if you were coming to meet me today, Dustin, and you had ordered something, rather than saying, "Well, I can't meet you, Charles, because I'm waiting for a delivery," you could pick a locker location near to where I am, and you could pick it up on your way out, as in, when you wanted it. So, you choose where you pick it up.
And the third option and approach, and this is particularly relevant in Africa, using a lot more retail. We intend to have thousands and thousands and thousands of retail partners, making short distance between each one where consumers can pick up their orders. That does two things. It massively improves the customer satisfaction, so customer satisfaction goes up because consumer has the shipment when they want it and what's convenient for them.
But the other part of it and very good news for the supplier is that every time we make a delivery through a locker or a retailer, we're able the reduce our cost of delivery very significantly, which means we can make money, which allows us to reinvest in the solution and services so we can look at things like drones, curbside deliveries, and everything else besides.
It's really cool. It's really exciting. Again, the beautiful thing about this is that very few people are doing all of the above, and that means we get a fairly clear runway to create market leadership across Africa, and as I just mentioned, in the Middle East, where I'm sitting from today.
Thanks, Charles. Did we cover all the points you wanted to make today?
I think so, Dustin. That's fantastic.
Great. Thank you.
About Charles Brewer
Managing Director at Mara Sokoni