The last-mile delivery challenge
According to Murad Saeed, Federal Minister for Postal Services, the logistics sector in Pakistan is worth $34.2 billion and has registered an annual growth of 18%.
Pakistan’s state-owned postal services recently introduced a set of improved services including EMS Plus, a 72-hour export parcel service aimed at the e-commerce sector. EMS Plus allows the delivery of parcels weighing up to 30 kilograms to Australia, Japan, Saudi Arabia, Thailand, the UAE and UK. In 2016, TCS signed an agreement with UPS to facilitate international express services in Pakistan. This allowed parcels from anywhere on the UPS network to be collected and distributed by TCS’s 4,500 delivery professionals. The agreement also allowed parcels from Pakistan to be shipped internationally using the UPS global network. A similar agreement was signed between M&P (previously OCS) and FedEx.
These big logistics companies can move massive quantities of documents, parcels and freight around the world efficiently. The process is fast, cost-effective and almost perfect. However, it is the last-mile delivery that proves to be a challenge and a costly logistical issue for both retailers and delivery companies. Last-mile delivery costs are estimated to represent half of the supply chain costs due to a combination of issues including lack of local knowledge (complicated addresses), the high cost of single item deliveries, overheads of retail outlets and on-ground HR. At the same time, customers have become more demanding and want things to happen instantly. Similarly, retail is changing rapidly and more and more businesses are providing door to door delivery. All this has created a gap and an opportunity for on-demand delivery services.