With 90% of the 26-foot box trucks registered in the U.S. independently owned and operated, it is often difficult for Shippers and 3PLs to find carriers that can compete with companies like Amazon or Walmart that offer cost-effective, sometimes even free, 2-day or 24-hour final mile delivery.
However, with the help of advances in technology, one provider is looking to improve final-mile efficiency by embracing the industry’s evolution to same-day delivery in the B2B space.
In episode 10 of Banyan Technology’s Tire Tracks podcast, Aaron Peck, Founder and CEO of Mothership, discusses how his company is using technology to standardize same-day delivery services.
“If you look at the supply chain today, you've noticed that a lot of things have sped up considerably. And I think we owe some gratitude to Amazon for forcing people who want to compete in this world to understand that overnight’s the thing now,” he said. “And not only is going to be 10 times faster, but it's also free.”
Opening Up Opportunities with Technology
Peck questions what the next steps for companies like Amazon are. How do they top what they’re doing, especially when intermodal has a certain speed that cannot be adjusted. “That boat from China is not sailing any faster than it does. And the 747 is going to do 500 miles an hour. We're not going to retrofit it to do 900,” Peck said.
This is where opportunity lies for technology in the final mile space.
“We think that there's this big opportunity for same-day delivery for B2B shipping that ultimately allows customers to get products in their hands faster than ever,” Peck said. “We need to embrace technology -- don't reject it, don't minimize it -- you will do so at your own peril.”
In addition to embracing technology, Peck said that understanding the evolution of business relationships will help you remain successful and grow.
“You have to understand the next buyer is a 30-year-old kid who doesn't like to talk on the phone and only likes to send text messages,” he said. “You have to realize that you have a future buyer coming up that is different. And if you want to grow your business in the future, you need to serve that person. If you minimize it, I think then you become part of the past not part of the future.”
Making Accessorials a Standard
To help neutralize costs in the evolving final mile space, Mothership includes certain accessorials as a standard in the shipping price.
“The reason that we don't charge for the accessorial is because it's almost like charging more because the truck has an extra wheel or something. It doesn't make sense to me,” said Peck. “I think you could argue that a liftgate has an expense, but I would argue that because you have liftgate, you're able to take a higher number of loads and now you've expanded your ability to make more money. Ultimately, carriers aren’t trying to make $10 or $20 on the liftgate. They’re trying to make several hundred dollars reliably every day.”
Instead of trying to nickel and dime customers, Peck said that Mothership is focused on generating like the largest number of customers who trust the company and will pump all of their volume through its platform.
To hear more about the future of final mile shipping and same-day delivery, visit https://www.banyantechnology.com/resource/building-final-mile-delivery-technology-episode-10/https://www.banyantechnology.com/resource/building-final-mile-delivery-technology-episode-10
All new episodes of Tire Tracks will be posted monthly on all major podcast channels including Spotify, Apple Podcasts, and Google Podcasts. Video versions of the podcast will be hosted on Banyan’s YouTube channel and the company’s website.
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