What key technological innovations will impact logistics over the next five years?
Richard Blown, Head of Innovation, Hermes
Hermes is the UK’s leading consumer delivery specialist, handling more than 300 million parcels in 2018. The business operates all along the retail value chain, supplying comprehensive logistical services to meet global demands. With innovation in the last mile continuing to spark questions in the logistics industry, take a look at our exclusive interview with Richard Blown, Head of Innovation at Hermes UK. He is sharing his thoughts ahead of speaking at Leaders in Logistics: Last Mile Delivery 2019 on key technological innovations shaping the industry and the key barriers to creating a sustainable delivery service.
What are the key barriers to creating a sustainable delivery service, and how can they be overcome?
When it comes to sustainability, there’s long been the issue of a lack of proven technology, so to overcome this, it’s essential that businesses invest in trials to secure buy-in at Board level. This is something that we’ve explored at Hermes and followed up with the largest ever initial order of CNG (compressed natural gas) vehicles in the UK in 2018 to make our fleet cleaner than ever. A solution that works nationwide is also crucial – for example, it’s only now that electric charging points and CNG fuelling stations are becoming more prevalent. Electric vehicles are great but they’re limited to how many parcels can be carried, which is where use of packaging needs to be challenged to make parcels as economical as possible. Another barrier is cost and avoiding passing this onto clients. Our corporate client base of 80% of the top 100 retailers are all acting to create a sustainable offer, from product through to delivery, and so we need to ensure as a partner for them that them and their customers benefit from sustainable options that can deliver results without big price hikes.
“Our corporate client base of 80% of the top 100 retailers are all acting to create a sustainable offer…”
Combining tech and sustainability, we’d love to provide a carbon neutral delivery option in the future. We also do this wherever possible in our operation and opened our most sustainable hub yet last year at Hemel Hempstead. Another way of thinking about this is to look at reducing journeys, so improving first-time delivery success which can reduce wasted fuel on re-attempts. Car boot delivery provides a solution here, as do lockers. Letterbox size delivery is also a good option here as first-time delivery is almost guaranteed – we’ve recently introduced Postable, our letterbox size delivery, to enable this.
“Combining tech and sustainability, we’d love to provide a carbon neutral delivery option in the future.”
What is the impact of the shift towards e-commerce in Europe and how will it continue to impact the logistics industry?
Customers continue to demand shorter delivery time frames for more convenience – plus more delivery options, which has a big impact on the industry, across all geographies. We’re part of the Otto Group, which is based in Germany, and we regularly collaborate and exchange insight and ideas for improving the consumer experience through innovation and tech, relevant for each territory. We are continuing to see International volumes grow and these are up 66% on last year.
“We are continuing to see international volumes grow and these are up 66% on last year.”
What are the key technological innovations which will impact logistics over the next five years?
Physical stores will be fully focused on providing an experience, combining retail with food and leisure activities that online can’t offer. Immersive tech such as AR and virtual reality will blur the lines between physical and digital retail further to help consumers to interact with products in store. In terms of delivery expectations, consumers will expect products to be delivered before they get home. By this time, 5G networks should be widely available, which will pave the way for smart cities and smart vehicles that can enable dynamic route planning and optimisation for autonomous vehicles. The likes of Amazon will continue to dominate and we expect Amazon to leverage revenue from advertising and cloud computing to invest further into on-demand delivery of the most popular products sourced from AI and machine learning.
“5G networks… will pave the way for smart cities and smart vehicles that can enable dynamic route planning and optimisation for autonomous vehicles.”
This use of data and AI will also enable greater personalisation for consumers. At home, we expect connected homes and vehicles will be able to provide enhanced delivery opportunities and self-ordering appliances should also be viable. Despite all of this progress, speed and reliability of service will still be vital.
Richard is a Digital Architect with over 20 years IT experience, passionate about new and disruptive technologies and how to harness these to accelerate the Digital Transformation Strategy.
Leading the Hermes Innovation Lab provides an exciting opportunity to show case his creative skills from using a Lean Start up technique of delivering MVP to customers within 5 day sprints, getting hands on to build technical proof of concepts, pitching ideas, videos and demos to clients and to the board.
A foundation of ten years working for IBM on cross industry assignments allowed him to gain a breadth of solution architecture and engineering principals, significant customer experience and technical leadership.
Richard will be speaking at Leaders in Logistics: Last Mile Delivery, taking place in London on the 27 June 2019.