The Race Towards Last-Mile Services

The wave of electronic purchases that came in the wake of the COVID-19 pandemic and social isolation launched a race in the logistics sector towards the digitization of all services companies offer, discussed speakers at Grupo T21’s ‘The digitization of the Last-mile’  program. "The last-mile plays a fundamental role in an environment where habits have radically changed," said Santiago Pineda, CEO of Mensajeros Urbanos, during the event.

The pandemic accelerated how people communicate with the digital world and promoted e-commerce among businesses and consumers. According to the Mexican Association of Online Sales’ (AMVO) survey “COVID-19’s Impact on Online Sales in Mexico,” 39 percent of the consumers changed their habits to purchase more online, as reported by MBN. In Mexico, e-commerce grew by about 81 percent in 2020 when compared to 2019, explains AMVO, showcasing its growing competitiveness in the face of the surging demand. “Last year, large and well-known retail companies in Mexico experienced many logistics problems. Many people started buying online and the companies did not have a developed e-commerce platform or defined delivery processes. If these failures happened to large companies, imagine the impact on smaller companies,” said Christophe Milhères, Managing Director at LalaMove Mexico, in an interview with MBN.

Last-mile delivery is perhaps the most expensive solution in e-commerce logistics, explained attendees at Grupo T21’s program. “When a large company has e-commerce sales, it faces big challenges. Although it has warehouses available, these are usually on the outskirts of cities. This complicates logistics because if the company wants to make same-day deliveries, it has to connect with different players in the city,” said Iván Ariza, CEO of Cargamos, in an interview with MBN. 

Not only is demand higher, but also customers are more informed and expect better solutions. “People now know that they can buy almost anything online and their expectations are higher. It used to be common to receive packages in three to five days, but now people want them the same day or the next day at the latest,” said Milhères. However, different digital tools offer opportunities for companies as they allow them to reduce the costs of last-mile services while optimizing quality and delivery times for consumers. Panelists agreed that “companies can still find more opportunities in the last-mile market, [which] continues to evolve towards the digital field,” according to T21.