Five benefits of Parcel Lockers for last-mile delivery

Home delivery and challenges for the CEP sector

Home delivery is the most common last-mile delivery method. On the other hand, last-mile deliveries are the main driver of excessive commercial vehicle traffic throughout the city. As online shopping continues to rise, this form of delivery is becoming increasingly important, as are those who perform these operations – CEP (Courier, Express and Parcel) sector.

The status quo for the CEP is that most of the packages are delivered during the regular working hours when recipients are frequently absent from their homes. This results in a lower number of successful first-attempt deliveries.

Given that one of the main goals of CEP services is to limit the number of unsuccessful deliveries, they employ a variety of ways to address the issue:

• Attempt delivery on another day –   This is the most cost-inefficient approach and most CEP service providers try to avoid this practice.

• Take the shipment to another address – To a neighbor, friend, recipient’s workplace, etc.

• Leave the shipment in the post office for the recipient to collect –  The CEP service provider might deposit the parcels at these locations and the recipient is notified about this option (applies only to National Postal Services).

These are all inefficient ways to solve the problem hence the need to introduce a more reliable and sustainable solution, such as a parcel locker.

An introduction to parcel lockers

Parcel lockers are boxes located in public spaces which the recipient can unlock with an electronic code. The locker acts as a temporary storage location in the final stage of the delivery process.

As parcel lockers concentrate deliveries and make them more independent of available time slots, they have become a popular and essential solution for reducing traffic and increasing cargo compartment utilization. With a rapid increase in e-commerce, efficient delivery is critical, and this innovative solution seems to be beneficial for all parties involved – customers, online stores, and logistics companies.

Five main benefits of parcel lockers

• Availability 24/7 –  Once the carrier has placed the parcel in the locker, customers are informed via SMS or e-mail and can access their packages 7 days a week and 24 hours per day, using either a PIN, barcode, or a specific smartphone app. The convenience of accessibility and proximity to homes or other frequented locations result in increased comfort, flexibility, and customer satisfaction.

• Better vehicle routing – When delivering goods to parcel lockers, a courier can drop off several shipments at the same time. This not only reduces the vehicle movement but also simplifies the route and leads to higher productivity. Moreover, parking, one of the biggest challenges for couriers when delivering, becomes way more manageable due to better accessibility.

• Lower delivery costs – From the perspective of logistics companies, the cost is considered a leading factor when delivering. Making a single-item e-commerce delivery is a costly proposition. Low-volume deliveries will always be operationally expensive, and logistics companies spend billions annually improving infrastructure and doing R&D to reduce these costs.
  As multiple deliveries can be completed at a single location at the same time, parcel lockers represent an efficient way to reduce last-mile delivery costs and gain a competitive advantage.

• Operational capability – With substantially more items per stop, nearly 100% first-attempt delivery, and ease of access to the stop, parcel lockers provide a far more efficient operating capability. Improvements can also be seen in stable access times, already known locations, and better parking options.

• Reduction of negative environmental impact – The most significant benefit of parcel lockers’ deployment is to limit the number of unsuccessful deliveries and the subsequent return of items by couriers. It helps to reduce unnecessary vehicle mileage with associated fuel consumption, noise, and congestion impact of urban freight transport.
  A number of statistics state that parcel locker delivery reduces CO2 emissions by two-thirds compared to to-door deliveries in urban areas.

Final thoughts

The growth of the B2C e-commerce market increases the importance of last-mile deliveries in intra-city areas. Therefore, it influences the growing demand for last-mile delivery, consequently impacting traffic and congestion problems. According to World Economic Forum (2020), demand for last-mile delivery in urban areas is forecasted to increase by 78% by 2030, resulting in 36% more delivery vehicles in the top 100 cities worldwide.

The parcel lockers have proven to be a sustainable and economical solution for the last-mile delivery system. Adopting this solution will become inevitable given the increased volume of package shipments, the rise of e-commerce, and changes in the lifestyle of consumers.