The Future of Last-Mile DeliveriesBy Lorenzo Núñez | Tue, 02/01/2022 - 10:28
Q: After the company’s rebranding, what innovations are you hoping to bring to the Mexican market?
A: One of the biggest changes we made was behind the scenes. Previously, we had five different brands globally. That represented a huge workload for our technical team because you have iOS, Android apps and even Huawei Gallery apps in some countries. When it came to developing and releasing updates and adding anything to the apps, it was challenging and a lot of work. We simplified all our apps into one, allowing our entire team to focus on improving just the one. This was a part of our rebranding, which was a massive undertaking that took us over two years to achieve. So that is one part.
We have also been working with new products. We recently launched our courier rental service, where companies can rent a courier for a day. Also, our same-day product has just arrived. Several companies offer somewhat similar services but usually these types of same-day solutions are only available to companies that have many deliveries. This means that companies that need to move fewer than 100 items, for example, do not have access to these services. We have worked around this problem. Our same-day solution will be offered at a flat rate for the metropolitan area. It will be available for a single delivery or for more than 100 deliveries at any time and at a very low price. Our rebranding has given us the ability to focus on developing these types of solutions faster and more efficiently. We are bringing more options to the table. For us, the more products we bring to the table, the higher the chances of clients trusting us to transport their goods.
Q: What can customers expect from Borzo now that the company has doubled its efforts to expand to other states in the country?
A: We learned the hard way in 2018 when we tried to open in Guadalajara and Monterrey. We quickly realized that we needed to have someone from the local area who could understand the local companies and the culture. Cities like Guadalajara, which are supposed to be quite similar to Mexico City, are very different in courier behavior. This time, we are hiring locally so we can properly understand the needs of our clients. We are also interviewing our clients in those cities to understand what solutions are best for that specific area, even though we offer the same suite of products. It is very important to understand where we need to focus the most.
Q: How is Borzo strengthening its return options and how should companies tackle the return policy challenge?
A: When we have an on-demand service that requires a return, we do charge due to the nature of the on-demand service. We charge from the origin point to the delivery point. Our systems allow clients to set up the return points. But the reality is that return options for on-demand deliveries are expensive and end up costing clients double the amount. With our courier rental solution, they do not have the same problems because the courier is rented for the day, when the return could be completed. Finally, with our same-day service, we are developing a solution to make it super cheap for our clients to complete product returns. This solution, which is still in development, will most likely vary from country to country and even state to state. Returns are a real issue because that is where you could potentially lose the client. We need to make it as easy and as economical as possible for our clients.
Q: What differences in business operations have you identified since the advent of the pandemic?
A: The global push toward e-commerce has been unexpected. We have seen the consumption of education among clients change dramatically. In countries like Turkey, we have seen the e-commerce boom push small companies to growth and even the emergence of new companies. In Mexico, nine out of 10 companies are selling online but the majority of these companies are still developing their channels. The key factor that will set apart the winners from the losers is the ability to work through different channels. Companies will need to offer the online sale, delivery, physical stores, pick-up and even on-demand services to continue competing.
Q: How have logistics centers changed throughout the pandemic and what is the future of logistics and distribution centers?
A: We believe that everything in the future will be delivered in under two hours with premiums for deliveries under 15 minutes. The ability to manage everything through your app is the future. We are already seeing companies in other countries pushing toward these practices, toward faster deliveries. To achieve this, companies will need to use dark stores and hubs. These are hubs that are not open to the public but perform similarly to a dark kitchen, where over 10 restaurants can operate using the same kitchen. Those companies like us that are focused on the last mile are looking for the perfect match to achieve those under two-hour deliveries.
Going a step further, click deliveries are the next stage, meaning that clients would receive a message notifying that a package is ready to be delivered. It is then up to the client to use the app to decide when that package is delivered. We believe these practices are closer than people may think. In fact, we project that these technologies will arrive in Mexico in around 10 years. I would not be surprised if we see automated cars and drones performing the deliveries by that time.
Borzo is an intra-city delivery service for businesses and individuals that continuously develops algorithms to optimize the delivery routes. Founded in Russia in 2012, it is present in 11 countries.