Zero Contact Delivery, the New Normal in the Logistics Industry

Zero Contact Delivery, the New Normal in the Logistics Industry

Mrinal Chakraborty, CIO, DTDC Express expounds his views on Zero Contact Delivery, the next technology frontier for the Freight and Logistics industry

The Freight and Logistics industry is gearing up for a new era of definitive change as digitization gains ground and customer expectations evolve. Collaborative technologies are paving the way for greater efficiency and more collaborative delivery mechanism and operating models.

One such evolution in our industry is the Zero Contact Delivery. The two key pillars of any delivery mechanism are a good, reliable address of the customer/ recipient and his/her correct phone number. Unless we have this correct and reliable delivery address and customer contact details, the delivery model cannot work most efficiently. Also, GPS features of mobility can’t be used to find out the location of the customer. If we have his/her mobile number we can keep him/her posted through our app, email, or SMS. All the above fails in want of the right address and right details of the receiver. The express distribution industry suffers heavily in the availability of such data. Unlike eCommerce where it enjoys a very good Shipper & Receiver data, it’s a daunting task for the express Industry

Also during the current COVID crises, its benefits cannot be overstated. These are times when social distancing has become a norm and COD(collection on Delivery) is practically disappearing in the interest of the safety, health, and well-being of both the customers and the delivery agents. All logistic transactions are becoming pre-paid. The Zero Contact Delivery emerging as a big positive milestone for the industry, in the long run.

Before the shipment is physically delivered to the customer’s stated address, we first inform him through an SMS that we will attempt the delivery on his address.  As soon as the delivery person reaches the customer’s neighborhood, he sends an SMS to the customer and then calls the customer to ask him for the OTP. This is a step towards customer verification and authentication to ensure that the shipment is delivered to the right customer.

If the customer is available on his phone and can share the OTP it is proven beyond doubt that he is the rightful owner of the shipment and indeed the right customer. The moment the delivery agent gets the OTP, he drops the parcel at the security/ customer’s doorstep and takes a picture of the delivered consignment (customer’s door or security lobby of his office/ locality) and sends an SMS to the customer that his parcel is delivered to the security or at his doorstep. Once the physical shipment is safely and successfully delivered to the right address, the delivery boy leaves the place. This closes the loop of the Zero Contact Delivery.

This is a paradigm shift in the freight and logistics industry and can result in a whole host of benefits for the customers as well as the logistics company and reduce the cost of Time wastage of waiting, Refusals, or any other time-consuming processes.

As an alternate delivery mechanism, this will plug a great of revenue leakage plaguing the sector. Delivery refusal results in 30 percent of e-commerce shipments. This happens when the customer refuses to accept the delivery. However, in the Zero Contact Delivery model, we do not allow the customers to refuse the parcel while on arrival.  With the reduced number of cancellation, rejection, and refusal of shipments, the chances of a high RTO(Return to Origin) rate and repeat delivery also reduces considerably.

Shipment refusal is a big challenge in our sector. It results in a steady rise in the cost of overheads. The movement, management, and storage of rejected goods in the warehouse is an added cost for logistics players. It also reduces the number of repeat visits made to the customer’s location.

Zero Contact Delivery is a positive step towards drastic cost improvement and long term profitability for the logistics companies. E-commerce players had this delivery solution at an early stage but the logistics industry only now working to catch up with the trend. DTDC is probably the first logistics company to launch this delivery model in the country.

There are some key prerequisites for supporting the Zero Contact Delivery mechanism. To begin with, the logistics players need a good/ reliable address and contact details from the customer. And for facilitating the Zero Contact Delivery, the delivery agent needs a good android app, strong telecom network availability, and robust GPS connectivity. These are the basic support structures for creating an evolved model of delivery.

With the Zero Contact Delivery model, we can ensure that we will have the correct data. In the future, we will be able to build on a clean data bank which will help us build on other data-driven innovations.

For this mechanism to work smoothly on a large scale, the logistics sector would require support from the leading mobile equipment manufacturers. Until now the equipment manufacturers have not taken considered this delivery model as a lucrative opportunity. They can monetize on this segment by creating cheap, yet rugged and secure devices that allow data capture and ML. They should create a smartphone with better software.

To know more.