An Alternative Last Mile Delivery Mode for Logistic Cost Reduction

Abstract

This dissertation is a study on the Last mile delivery (LMD) and is divided into three main parts. In the first part, the researcher reviews previous works on LMD. A questionnaire will be created to query all the stakeholders. It will be a questionnaire about LMD modes, including home deliveries (attended and unattended) and collection points (manned and unmanned). Respondents or decision-makers often have difficulty rating alternatives to the feature under consideration. The data is aggregated ratings of fuzzy data denoted by triangular fuzzy numbers. Then, existing last mile delivery modes are compared from the perspectives of all stakeholders by Fuzzy Technique for Order Preference by Similarity to an Ideal Solution (Fuzzy TOPSIS). The results show that customers and merchants are concerned about security and safety criteria. Therefore, they selected the attended home delivery and manned collection point modes, respectively. On the other hand, delivery providers are focused on cost and delivery flexibility. Therefore, unmanned collection points are the most preferable choice. In addition, delivery service experts and merchant experts will be interviewed in depth. The service providers and businesses thought that good service and low prices would influence a customer’s choice of the last mile delivery.

In the second part, locker sharing mode is presented as a novel mode of last mile delivery. The proposed mode is compared to existing modes by using a simulation technique. The arena simulation program is used as a research tool. Then, the data output from the simulation is applied to calculate the last mile delivery cost per parcel. It is found that the proposed mode is more efficient than other modes. This mode has the lowest cost compared to competitive modes. Its locker utilization is also higher than the current unmanned collection point. It is seen that the combination of lockers between companies could reduce costs for delivery service. It will enable delivery service providers to reduce service charges for customers as well. The locker sharing mode is optional for the delivery provider. Furthermore, offering a locker sharing service could be a novel delivery strategy.

In the third part, a business model for the proposed mode will be created and analyzed. Data for the business model canvas was gathered through interviews, a literature review, and a search of related provider’ websites. The BMC of the proposed mode shows that the value proposition can meet customer needs because it can solve problems that customers focus on, including safety, convenience, and cost. There is also a SWOT analysis of the lockers’ strengths, weaknesses, opportunities, and threats. At the break-even point, the minimum number of slots for one area point was computed. Each country has varied investments, and adds the extra profit that each company requires in terms of cost. On the other hand, if the delivery service provider adopts this locker sharing service, the cost of maintaining the delivery provider’s lockers is reduced, and there is no need to invest in more lockers to reach customers. This improves delivery efficiency while lowering expenses.

-