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Postman Shouldn't Call Twice: How Much Failed Shipments Cost and Contaminate

2021-05-03T16:59:48.459Z

Between 15 and 25% of e-commerce operations are frustrated with no one at home. Experts in the sector ask to rethink the model and opt for collective lockers or points of convenience



An Amazon courier delivers packages north of Washington DC on April 6. Tom Williams / CQ-Roll Call, Inc via Getty Imag

Patricia was not at home when the delivery man arrived. She comments it relieved, already with the package in her arms. Because the delivery man, instead of leaving the dreaded notice in her mailbox, called her. "He told me that if I preferred, I could leave it in this store," he says at the door of Calzados Vignon, in the Lavapiés neighborhood of Madrid. "And the truth, much more comfortable." And more profitable. A study by the consulting firm PCA Predict estimates that the cost of a failed delivery amounts to 15 euros. And these are very common. Before the pandemic, about 25% of parcel deliveries in Spain were frustrated. More recent data suggest that this percentage has dropped to 15%, perhaps because we spend more time at home.

It is still too much. This means that if one and a half million packages are delivered in Spain every day, about 225,000 are returned to the logistics centers of origin at the end of the day. And forwarded again the next day. The thing about the postman always calling twice is real, at least when he brings a package from Amazon. And that is a problem on an economic level for logistics companies, but also on an ecological level, for everyone. In this context, the delivery men have found an ally in the most unexpected place: the neighborhood stores.

Maria Jesús González is the third generation at the helm of Calzados Vignon. “Since 48 we have been here selling Marcelina's espadrilles, the ones that last the longest,” he says with pride. Marcelina was his grandmother. Espadrilles continue to rest on the store shelves, piled up like bricks, building a wall of boxes and esparto grass. Along with them there are also more modern sneakers. And a dozen packages from Amazon, Zara and other e-commerce brands. “Sometimes we even have slippers,” says the shopkeeper in a confessional tone, “but what are we going to do? If you can't beat the enemy ... ”González joined him nine months ago. "And the truth is that very well." It is not a millionaire business, you just made 40 cents for delivering your package to Patricia. “But look, it's a way of making ourselves known.This is like one more showcase and in the end, that's how you get a sale ”, says the shopkeeper. More than 70 years in the Madrid neighborhood of Lavapiés and in the end many neighbors know her thanks to Amazon.

Eduard Álvarez Palau, professor of Economics and Business at the UOC and an expert in logistics, agrees on the diagnosis. "I think it is essential to strengthen the commercial fabric and to maintain the link between consumers and merchants," he says. "And the fact of going to pick up an order often leads to small purchases that help local businesses to survive." Palau encourages you to choose this option when buying online, something that less than 10% of consumers in Spain currently do.

This modality, the expert abounds, has other positive externalities: "It reduces the number of destinations for operators and guarantees that delivery can always be made." It is more efficient. Palau points out that the public sector is already betting on store collection. "The Generalitat de Catalunya includes this in the commercial law," he points out. The private sector is lagging behind, so this economist believes that the consumer has to be made aware.

Electronic commerce has increased exponentially in recent years, putting city infrastructures, the capacity of operators and the very survival of many physical businesses to the test.

That is why the sustainability of the process has begun to be questioned.

Striking initiatives have emerged such as messengers riding electric bicycles or modern micro-warehouses in city centers.

However, the most efficient solution goes through something as simple as changing the delivery address.

Maria Jesús González, owner of Calzados Vignon, in the Madrid neighborhood of Lavapiés, where e-commerce packages are also collected.Enrique Alpañés

"It's that our mouths fill up talking about sustainability, but who is paying for the party?" Juan Sandes Villalta is GLS Spain's chief operating officer and has more than 20 years of experience in the sector. Enough to know the answer to that question. "But we are not in a position to pay anything", he replies, "the last mile [the final stretch in the delivery of a package] is a business of pennies, it is profitable only by volume, because in the end you add many cents" . In this context, it is difficult for any parcel company to make large investments. The ball is in the consumer's court. But companies are losing the game. And by far. Failed deliveries mean a loss of approximately € 30 million per year.

Sandes set up the Punto Celeritas collection point network when he was director of that company.

You know how they work.

You know they work.

“When many consumers decide to go to that point of convenience, the

carrier

makes only one trip, one stop.

There he leaves ten packages, put him, instead of making ten stops at different addresses.

The advantage is clear ”.

To change the model, he argues, you do not need large investments, just change your mindset.

But this can be just as challenging.

“90% of customers in Spain want them to take it home, although it is just as practical to pick it up at the store below.

In countries like Denmark the percentage is the opposite, 90% put convenience points as the place of shipment ”.

Mailboxes: Smart, Shared, or Larger?

In this, as in everything, we are coming out of a parenthesis. With the confinement, home orders skyrocketed and failed deliveries were reduced to the anecdotal. But as we return to normal we return to the starting situation. Many actors in the sector are taking the opportunity to ask for a reinvention of the model. The post director himself, Juan Manuel Serrano, did so in a talk about the sector organized by

El Español

. "Logistical problems in large cities occur when we cannot deliver the package and we have to return a second time," he said. “There the costs skyrocket, it is unfeasible and it is uncomfortable for the recipient of the package. To solve it, he did not bet on large investments or digital revolutions. “I would settle for the mailboxes to be changed. Because in those of now there is no room for a package ”, lamented the director of the Post Office, encouraging that this detail be changed in the new urban plans to adapt to the last mile.

While these new constructions arrive, different private initiatives have already launched to create mailboxes not only bigger, but more intelligent. Deliberty is a mailbox company that is controlled from the mobile, being able to receive or return packages without the need for interaction between messenger and user. Send2Me proposes a similar model, replacing the key with an access code. Mailboxes are made smart to adapt to e-commerce. These initiatives are practical on an individual level, but sterile on a global scale. They are more viable in single-family houses and less in the apartments of the city centers, where the real problem is. Different shared mailbox initiatives such as Amazon hub lockers or Citybox are emerging for this environment. This type of urban lockers are, at the moment,an incipient infrastructure in Spain, where there are about 10,000 ticket offices. In France, for example, more than 60,000 have been opened.

As long as the mailboxes are not adapted, the city is adapting. In Barcelona, ​​according to 2018 data, 20% of the mobility of the metropolitan area is generated by the distribution. Professional vehicles represent 40% of polluting emissions. And the city is not prepared for this. Ignasi Ragas knows it well. This logistics expert has advised, among others, the city council of Barcelona. "The

delivery

[delivery to the place of consumption] makes any point in the city a delivery point, ”Ragas says. “Before, the distribution of goods went to shops, places that have loading or unloading spaces. But now all that has faded ”. Ragas does not consider this to be a problem, at least not in most of the territory. "Things change when we talk about urban areas where there is a high residential density and also commerce."

The idea that cities are becoming stressed with electronic commerce is more and more widespread, but this economist is not so clear about it. "It depends on the use you give him. If there are 20 people who instead of taking the car to buy an object ask for it through Amazon and choose to have it delivered to a store in their neighborhood, we are saving 19 trips, "he says. He believes, like his colleagues, that this type of delivery is the way to go. But it is difficult to travel it. “Among other things because there is no clear price penalty, as happens in other countries. The consumer has no incentives ”.

But you can have a will, he says.

The solution is in your hand.

One of the most negative externalities of electronic commerce can be solved (or mitigated) with a gesture as simple as changing the delivery address.

It is normal for last mile operators to focus here, they are financially interested and it is easier to pinpoint user behavior than company practices.

But the solution they propose may suit both of you.

What they save on gasoline, the city saves on traffic jams.

And the world, in pollution.

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Source: elparis

All tech articles on 2021-05-03

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