This article is based on a podcast where our experts made their predictions for final mile in 2021. Listen to that podcast here.
2020 was a challenging year. But those challenges brought out the best in some companies, pushing for needed changes and innovations.
What will 2021 bring to the last mile table?
The U.S. was falling behind other countries when it comes to utilizing drones. The lack of regulation was frustrating startups and companies who wanted to exploit the new technology. While some organizations began to use them for small deliveries, their delivery radius was prohibitively small.
Finally at the end of 2020, the FAA put new, more structured rules in place to allow the drone programs to expand. These rules include:
- Remote ID, basically a digital license plate for the drones, so they know where it is and who it belongs to.
- Increased weight to 55 pounds per drone without requiring a special license
- The ability to drive the drone over people and at night without a special license
- Drone operators will need the equivalent of a pilot’s license that is on them when flying the drone.
After releasing these rules, the FAA announced that they’ve brought in American Airlines and Amazon to consult on drone regulation.
With this solid foundation, drones have endless potential in 2021. After years of slow growth, both the government and drone companies are ready to accelerate development and wide-spread use of drones.
Two COVID vaccines are being dispersed in the U.S. and soon we may have a third. The currently approved vaccines have strict temperature requirements that have put unprecedented pressure on the cold chain. The third, not yet approved in the U.S., vaccine by AstraZeneca requires “typical” vaccine storage temperatures of 2-8 degrees celsius.
As supply chains rush to deliver as many vaccines as quickly as possible in the first quarters of 2021, cold chain capacity is tightening. As the country is faced with more shutdowns and therefore more at-home eating, eyes turn to food supply chains that depend on cold chain for transport. Will there be enough cold chain capacity left to supply grocery stores?
Food that requires cold chain transportation may very well be the toilet paper of 2021.
Redefining Same Day “Delivery”
2020 may have accelerated changes to retail, but 2021 may be the year we see the fruition of many cultural shifts and technology improvements that started in 2020.
Going into 2020, retailers had their eyes set on achieving the illusive same-day delivery. After the pandemic hit the U.S., those plans changed. The record-breaking flux of orders that came through left many scrambling and even two-day delivery became unlikely.
Retailers quickly began to push consumers towards limited-contact BOPIS (buy online pickup in store) and BOPAC (buy online pickup at curb.) While utilizing these services, some users of major retailer apps have reported load balancing, where the retailer pushes them towards a specific pickup location instead of their typical location.
2021 will likely be a continuation of that push. The lower costs associated with BOPIS and BOPIC make it appealing to retailers, while consumers can satisfy their need-it-now mentality.
One of the many things put on hold in 2020 were company’s sustainability goals. As focus shifted towards survival, lessening greenhouse emissions and changing packages fell down the list of priorities for many companies.
While it may be a more cynical view, sustainability will be back in 2021, but not because of moral obligations. Instead, it will be a push to relieve themselves from the shortages of cardboard and other packing materials we’ve seen in 2020.
In 2021, Companies will be required to innovate and find new materials to pack their products in, meanwhile gaining the opportunity to tackle their sustainability efforts.
The End of a Singular-Carrier Network
All three of the major parcel shipping companies struggled (and in some cases failed) to handle what 2020 brought. They continued to charge peak-level prices throughout the year and, just weeks before peak season, let customers know of capacity caps that were coming for the holidays.
While many retailers took it in stride, higher return rates, costs and customer dissatisfaction means it’s time for these companies to make a change.
How does one mitigate risk? Diversification. Depending on the “Big 3” to manage all of your last mile needs is a thing of the past. Now, with technology in place that makes it simpler than ever before, companies can turn to regional and local carriers to help make deliveries.
2021 is the year where we’ll see more diversification in companies’ delivery networks. Companies will begin to spread out their capacity over many carriers, allowing them to be more agile, improve customer service, and save money.
Technology to carry you through the years to come
Whatever your 2021 holds, eTrac has the technology to make this your most successful year yet. With eTrac, you can build a more agile last mile that can quickly pivot around whatever challenges come next.
Ready for a better way to reach the last mile? See a demo here.