Reuters Events | Supply Chain & Logistics Business Intelligence

“Customers today want to have control over the delivery experience,” says Itamar Zur, the CEO of Veho

This interview was conducted at Reuters Events: Supply Chain USA (May 17-18, Chicago, 2023).

While e-commerce is easily the biggest disrupter to physical retail, its pace of growth has complicated the traditional last-mile segment, bringing sizable discrepancies to the fore. For one, the last-mile segment was once primarily designed for bulk deliveries with pre-decided schedules. It was not equipped to handle the volume and speed of individual parcel deliveries demanded by today’s consumers.

This ‘inflexibility’ of traditional carriers and shipping companies has meant that last-mile fulfilment often struggles with inefficiencies, resulting in delayed deliveries, higher operational costs, and reduced customer satisfaction rates. “E-commerce logistics has been built around fixed capacity and fixed fleets. You have the same number of drivers and trucks every day,” says Itamar Zur, the CEO of Veho, an end-to-end parcel delivery company. 

A year-round, uniform last-mile capacity availability poses a problem during peak seasons when the volume of e-commerce parcels increases dramatically. Meeting these peak season demands requires a ramp-up in capacity, but permanently adding this supply risks leaving companies with costly unused capacity during off-peak times. 

Veho solves this predicament via its flexible marketplace that crowdsources last-mile capacity to seamlessly match it with demand. Zur explains that this system ensures an exact number of drivers and the right type of vehicles on the road daily, shrinking deadhead mileage. 

From the perspective of shippers and retailers, guaranteeing reliable last-mile delivery operations for their freight is crucial in managing customer expectations. “Customers today want to have control over the delivery experience. Part of the technology we’re building is having a direct line of communication with the customer to give them control over the delivery. The customer can chat with live customer support on the app,” says Zur. 

 Aside from creating a marketplace for delivery partners, Veho also addresses their challenges with route planning and optimization. “We offer routing on the platform and allow partners to assign routes to themselves and deliver the packages. By matching supply and demand, we deliver north of 99% on-time delivery,” explains Zur. 

A segment often overlooked is returns logistics, which is increasingly becoming a service differentiator in enhancing the customer service experience. “Some brands approach this problem by making returns difficult for customers, as they think about profitability and see returns as a cost centre,” points out Zur. “We advise brands to adopt the long-term, holistic approach, and not to think of returns as a cost centre, but as a customer lifetime value centre.”

In a case study by Veho with 1,000 e-commerce buyers, 74% of the respondents stated they were much less likely to repurchase from a brand with a challenging return process. This further accentuates the need to streamline the returns process while providing a premium experience that will help retain customers. Many customers are willing to pay for associated fees for returns, says Zur. 

By making returns a competitive edge, brands can attract customers, and ensure their loyalty and repeat business. In essence, providing a comprehensive last-mile delivery experience, including a simple returns process, is critical to unlocking true profitability in e-commerce. 

Interested in finding out more about Supply Chain USA 2024 (22-23 May, Atlanta)? Then click here.