Explosion of on-demand deliveries

Whether you're thinking about new on-demand, express delivery or food delivery services, these new services that are flourishing are trying to bring a new solution to traditional home delivery. Their credo: quality and speed.

By Arnaud Seydoux

10/07/2018

Indeed, the on-demand economy has emerged with services such as Uber, Lyft or AirBnb, advocating immediacy to get a means of transport, housing, or a cooked dish. The traditional logistics environment is being upset by start-ups that specialize in last-mile delivery on demand. These new companies are leveraging their innovation and technology integration capabilities to optimize delivery services while achieving economies of scale. Often, they exploit algorithms developed since the 90’s and integrate them into this new framework of on-demand logistics, especially for food delivery.

A real-time automatic manager

It only takes a simple example to realize the importance of these optimization algorithms in the current context. Let’s take a fast food chain that receives hundreds of orders a day, which employs a fleet of 10 scooter delivery men, and commits to deliver all its customers within 40 min after their order. There are obviously two peak periods for orders during the day: lunch and dinner.

When the first orders arrive in the morning, the 10 deliverymen are on standby, the orders are rare and the best strategy is to appoint a deliveryman to take away this first order. When the second order arrives, 9 deliverymen are still available since the first is in delivery. So we send a second deliveryman.

When we reach the rush hour, the restaurant must adopt a new strategy, because all the deliverymen are in the race. It is at this point that the algorithms make it possible to group the orders, according to the size of the package, the correspondence between the delivery and the delivery of the same courier, while respecting the deadlines promised to the customers. In a logistics similar to that of Uber, the software will detect the courier closest to its location in order to estimate the delivery time.

The need to optimize deliveries at all times

The algorithms can calculate in real-time, throughout the day, the best routes for each deliveryman. Each time a new order is placed, they are asked to solve various problems (lists of orders to deliver, the available couriers and all the constraints to be taken into account). They then optimize by distributing the orders between the couriers of the fleet in a minimum of time to guarantee the best experience for the customer who is waiting for his dish.

A balance point lies between the delivery time of customers and the cost of operations. These algorithms make it possible to determine the balance for a company, between having fewer couriers (lower cost, but guaranteed longer delivery time to the customer) or more couriers (more expensive, but with a much shorter guaranteed delivery time) . The fewer deliveries you have, the more you have to group the operations on the same courier to deliver your customers, and that will extend the delivery time of the customers.

Such an approach is particularly useful for effectively managing peak demand times when the kitchen is busy preparing many orders and all couriers are on delivery.

Orchestrating transport in the smart cities of tomorrow

Among other challenges, smart cities will have to meet the expectations of residents and consumers for deliveries that are ever more numerous and faster. Whatever their means of locomotion – scooter, bike, electric car, VTC … -, the deliverymen will inevitably be more numerous in the urban centers, and the necessity of orchestrating their tours will be at the heart of an economic activity casting.

The intelligent and connected city of tomorrow aims to facilitate, streamline and optimize the daily life of its inhabitants, with ever more efficient and immediate services. Eminently linked to the explosion of e-commerce and the proliferation of mobile applications allowing instant access to a multitude of services, the issue of delivery and management of transport in urban centers is one of the major challenges smart cities.

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