Disruption of the air cargo supply chain will continue as e-commerce becomes ever more important. Some solutions to the problem were put forward at the Last Mile ASEAN Conference and Expo in Bangkok last month.

Last mile is usually the shortest part of the journey for goods, particularly when those goods have been flown in from other parts of the world, but accounts for close to a third of logistics costs, said Rajesh Kumar, head of solution advisory for Ramco Logistics.

“It has implications for all the parties in the ecosystem,” he warned. “Please think of the kind of pressure you are going to face.”

Kumar cited in particular the problems with sustainability this transport creates and noted that the industry also needs to look at matching assets with customers better as well as load optimization.

Backing up through the supply chain, last-mile delivery will “really make a difference when it comes to warehousing,” said Benjamin Dietrich, global sales business manager, e-commerce and fashion, for logistics company Interroll.

Dietrich’s basic argument is that an already-complicated situation in warehouses as requests are processed from a number of different models will become even more so as new ways of ordering goods, such as voice- and cloud-based technologies, become even more complicated.

“All the different business models cause a lot of different trends in the warehouse,” Dietrich said. “You need to change your operations,” he added.

The response he outlined was multi-pronged but included a shorter time window for planning, and for installing systems that are flexible and scalable. These also need to be Industry 4.0 ready and should make machine to machine communications and predictive maintenance a reality, he said.

What will help with this new highly technical way of doing things is the variety of different systems to choose from, which are being added to and offer new handling opportunities.

“You need to investigate the technologies,” said Dietrich, again stressing the importance of scalability.

Less tangible – but probably just as damaging – is the potential damage to brand reputation can be caused by poor last-mile service, as the last-mile delivery is how consumers tend to perceive the entire logistics chain.

This is sometimes exacerbated by last-milers using casual suppliers, especially for drivers, not all of whom are trained. A related problem is some only last-milers only serve a small area. Thai logistics company Lalamove, for example, is active in Bangkok but has no plans to extend to cover the rest of Thailand, despite demand and customers being there, Dietrich said.

Lalamove has made efforts to improve on the quality of its staff. Santit Jirawongkraisorn, the company’s managing director, regional country operations, told the conference that it requires employees to come into the office and undertake training, and that while it uses an e-commerce business platform, it is not allowing its staff total remoteness.

The rapid growth of last mile is also pulling in new players, including large corporates such as Amazon, JD.com and Alibaba, all of which are building their own logistics networks.

“Keep an eye on them,” was Kumar’s stark warning. “They are going to seriously challenge you.”

Some solutions to facing the large corporations were suggested at the conference, with increased cooperation being one of the most common.

“[We] will have to come together and agree on the deliveries together,” said Arlene P. Padua-Martinez, president and managing director of Post10 Worldwide.

Adding to the workload in this sub-sector is the increasing tendency towards short time frames, with two hours now being a norm in some urban areas, as well as more customers wanting on-demand services.

By Michael Mackey

Southeast Asia Correspondent | Bangkok