COVID-19 is catalysing the adoption of new logistics technology and processes, especially in the last mile. Retailers without a strong digital footprint in these socially distant times, are having to catch up, remodel, collaborate. We’re watching grocery wholesalers become retailers, restaurants become takeaways and delivery drivers become key workers.
We’re not just seeing logistics operations adapt, we’re watching new logistics models emerge or grow as COVID-19 switches up trends and re-writes buying behaviour. Online fashion retailer Boohoo, for example, has seen a boost in sales of tops and joggers during lockdown; the fashion for video conference calls - according to a BBC report.
The likes of Boohoo already have a robust online retail and delivery model in place. And right now, delivery is King. According to the Office of National Statistics (ONS), online sales as a proportion of all retailing - reached a record high of 22.3% in March 2020 as consumers switched to online purchasing following the pandemic.
At the same time, clothing store sales in the UK saw a sharp fall of 34.8% compared to February. Food stores and non-store retailing were the only sectors to show growth, with food stores seeing the strongest growth on record, at 10.4%.
Businesses have been pushed online, despite their model. Watts Farm is a good example of a company quick to develop an online option. The lockdown left the business with warehouses full of food and drink at its 10 sites across Kent, Essex and Bedfordshire due to the food service industry grinding to a halt. Restaurants, hotels and schools cancelled their orders, a £400,000 stockpile of food was going to waste, and 150 jobs were at risk.
By acting quickly and investing in new technology - a new e-commerce website - within a month, this dire situation turned into 14,000 orders and a new business model, with online sales as its sole route to market. The tech company behind the website was Kayo, which suddenly found itself in logistics, when it had to source a distribution partner for the farm. Kayo contacted logistics operator Alan Firmin to be a distribution partner for Watts Farm. With Alan Firmin on board, Watts now had a click and collect delivery system in place, and a new storage and logistics model.
According to delivery giant Hermes, SMEs across sectors are “flourishing” right now as consumers look to online alternatives during the lockdown. Its reported that it’s currently delivering around 700,000 parcels a week on behalf of its SME customers - an uplift of 100% on this time last year. Whistl’s response to the switch by consumers to online retailers, has been to launch a trial in three locations of a new delivery service for those with low-volumes.
Despite a clear surge in online retail and in creative delivery options, Paul Martin, UK head of retail at KPMG, warns: “Grocers and online retailers may appear beneficiaries with our high streets currently void of all footfall, but the surges here aren’t likely to be enough to make up for the lost ground across the sector more broadly. Added to that, a surge in sales hasn’t necessarily meant a rise in profits, with added costs associated with meeting demand in this climate.
“Only those deemed ‘essential’ currently, or those with robust online operations, are able to adapt to this current climate. Those that can’t, are naturally fixated on when the restrictions will lift.”
Scaling up delivery
Digital platforms have never seemed so essential, and there’s one in particular which keeps popping up in SHD Logistics’ inbox. FarEye claims its software will “seamlessly scale-up your delivery operation within days.”
It’s offering its delivery logistics service for free to retailers selling food, pharmaceuticals and other necessary product.
Amidst the pandemic, the digital platform has been awarded an investment of USD 25 million led by M12 (Microsoft's venture fund). The company says the fund from M12 will help enable movement of essential goods/services and also accelerate growth in Europe. It plans to “step in and empower businesses to scale their delivery operations by making its technology available worldwide.” The pandemic has opened the door for the adoption of new technology, and if it’s free, that’s another one unlocked.
If delivery is lockdown King, who is the delivery driver? One SHD Logistics’ reader contacted us, concerned that the keyworkers essential to delivery, aren’t being properly protected. “…some research needs to be done into how some of the large logistics operations treated truck drivers in relation to providing decent materials, sprays and cleaners for cabs etc. Seems a lot of talk about dedicated cab cleaners but nothing hardly at all, I have spoken to several drivers and it seems to be an issue… these guys are risking their lives and families.”
We were keen to find out how operators are updating their safety measures for drivers, and share some best practice, so we asked Jacqueline O'Donovan, managing director of O'Donovan Waste Disposal, and winner of The Logistics Awards Safety category in 2015.
O’Donovan told us: “The focus is on changing daily behaviour to make sure that the ‘new’ normal becomes routine practice. As well as providing hand sanitisers to use in-cab and the necessary PPE already used in our sector, drivers are being urged to wear face-masks and we have asked them to use latex gloves in addition to their cut resistant gloves as an extra precaution…
“We have changed our delivery processes to a contactless mode so that signatures are no longer required. In addition to this, we have allocated lorries to staff so that the same person is using the same vehicle daily in order to reduce cross-contamination. We are currently looking into industrial in-cab cleaning services so that we have a ‘deep-clean’ weekly.”
Creative processes, new services and quick fixes are keeping companies alive and people in jobs during lockdown. But will these options stick? We expect there to be even more creativity in the new world and hope that sustainability will be a key driver, and drivers will continue to be seen as key.