The biggest last-mile challenges facing the logistics industry are: failed deliveries and missed deliveries.
40 million deliveries fail on the first attempt in the UK.- UK Delivery Index Report, 2019.
Customers hate to wait for their parcels, and on the other hand, it is equally painful when customers aren’t available even after all the relevant notifications. These failed and missed deliveries can impact your efficiency, and increase your reverse logistics costs.
PUDO (Pick-Up and Drop-Off) point facility is a smart step towards solving these last-mile challenges.
What is PUDO?
PUDO or Pick-up and Drop off point is a designated area where consumers receive or drop-off E-commerce packages at their convenience. Many countries like Indonesia, UK, Sweden, China, etc. have an advanced PUDO infrastructure.
In many other countries, the PUDO model has started to gain prominence now. The concept is still catching up as consumers are still experimenting with this concept.
Types of PUDO Locations
- Locker bank: Infrastructure that helps you independently send or receive parcels.
- Convenience store PUDO: Convenience stores are local retail outlets that provide consumers with parcel services on behalf of their contract partners (parcel carriers).
- Parcel shop: Business whose primary purpose is to provide consumers with parcel services.
How PUDOs can redefine delivery efficiency and convenience?
Consumers already feel that home delivery methods have become outdated. PUDOs (Pick-Up And Drop-Offs) help you manage delivery volumes efficiently by increasing the density of collection points. It ensures successful first-time deliveries, thereby eliminating service failures and reducing excessive costs.
Logistics companies value efficiency, and consumers value convenience. Redirecting deliveries to PUDOs benefits both of them in different ways.
Zero wait time
55% of consumers switch to a brand if it offers a quicker delivery service.- Capgemini Research Institute, 2018.
Consumers hate to wait for their deliveries. and every missed delivery causes consumers to lose trust. It forces the parcel carriers to incur costs of holding the parcel longer and rescheduling deliveries.
With the PUDO setup, consumers need not hang around at their office or home waiting for the delivery. They can rather focus on things that demand their attention. Locus can incorporate customer preferred time-slots into the PUDOs setup using time-slot management, this drives efficiency in last mile experience.
Increased flexibility and convenience of delivery options
65% of consumers demand greater flexibility of deliveries.- The last-mile retail study, 2018
If two words can define customer experience, they are— flexibility and convenience. Urban consumers today live a busy and fast-paced life.
PUDOs help consumers collect packages at their convenience. Whether consumers need to send or pick up parcels, PUDOs reduce delivery failures.
Safe and secure location for products
75% of consumers in the UK value safe and secure storage of products.- Citizens Advice Research on the consumer experience of parcel deliveries
Safe and secure storage of parcels determines the customer experience in the last-mile delivery. Leaving parcels outside the door when customers are unavailable can lead to damage or loss. Else the delivery rider returns it to the depot, forcing the customer to travel to an inconvenient location.
PUDOs ensure a safe and secure location to store parcels.
Reverse logistics made easy
40% of returns channeled through retail outlets can reduce reverse logistics costs by 7%. – Capgemini Research Institute, The last-mile delivery challenge 2019.
One of the biggest challenges in last-mile delivery is supporting the free shipping option. This free shipping option applies to reverse logistics also. Missed deliveries increase your reverse logistics costs. Managing reverse logistics for massive delivery volumes makes your last-mile logistics inefficient.
PUDOs provide an extra option to return items to sellers. It reduces the reverse logistics costs in the last-mile delivery, thereby supporting free return services to consumers. It also helps in executing comprehensive and cost-effective return logistics, thereby simplifying your reverse logistics operations.
Reduces last-mile delivery costs
Home deliveries have made last-mile deliveries quite costly. It requires each package to be delivered to a different location and demands a longer journey time. Also, it adds to fuel costs, driver costs, traffic congestion costs, thereby impacting your cost-efficiency. Last-mile operators are also having a tough time in sustaining their First Attempt Delivery Rates (FADR).
Instead of delivering hundreds of parcels to individual doors, operators can instead deliver the parcels to a handful of PUDO locations. This reduces the time spent by drivers on the road. PUDOs with preferred time slots lead to fewer miles driven and higher capacity thereby resulting in a higher delivery success rate.
PUDOs infrastructure demands essential technological support like real-time tracking, user preferred time slots and shipment sorting software.
Locus’ MotionTrack compliments Pick-Up And Drop-Offs in real-time tracking. It helps you send real-time notifications and alerts to consumers.
Locus’ IntelliSort helps sort parcels based on delivery zones of PUDO locations. Also, it helps allocate riders based on their skill sets, delivery volume, and vehicle capacity.