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Hubs ensure cheaper deliveries

Last-mile distribution is being facilitated by decentralised hubs in city centres, giving customers easier access

Warehousing hubs are enabling retailers, e-commerce and healthcare providers to provide cheaper and faster deliveries. Smart logistics technology provider Picup has partnered with Stor-Age Property REIT Limited to provide decentralised hubs in city centres around the country, allowing customers to gain easier access to last-mile distribution.

Couriers may not immediately spring to mind as being enablers of the shared economy – the act of sharing goods or services with others in order to save on costs, carbon emissions and other factors that add to the complexity.

Instead of using their own outlying warehouses to store goods to be couriered to customers on order, Picup is now providing decentralised hubs. There are currently four across the country, through a partnership with Stor-Age, and many more are in the pipeline.

They act as consolidation points for the Picup network to deliver to the end-user within a radius of between 10 and 20 kilometres. This compares to dispatching them from large depots outside of the city, which takes time, sometimes days, and incurs high monthly rental fees.

“Through the Hubs concept we are creating shared space for our customers where they only use what they need when they need it,” says Antonio Bruni, CEO of Picup. “A parcel comes into a Hub from a store or warehouse, and won’t stay on the floor for longer than two hours. There is a constant flow of parcels coming in and out of our space; we don’t sit on parcels, they go out as quickly as they come in.”

Given that lengthy delivery speed times and the high cost of shipping are two of the key reasons consumers don’t complete a sale online, hubs speed up the former and reduce the latter. With an increasing demand from customers to get their goods as soon as possible, at the lowest cost, the hubs concept thus improves the shopping experience for the end customer.

Bruni says the consumer wants their parcel delivered as quickly as possible, and hubs allow this to happen through same-day delivery. 

“Our customers want more efficient and cost-effective service providers while their customers want faster delivery times. As e-commerce purchasing becomes ever more prevalent and consumers become more demanding when it comes to shipping, this has to change, especially when there is so much more competition in the market thanks to the pandemic.”

Besides using space optimally, the delivery process is faster due to “gig economy” riders being located within the Hubs areas, ready to collect as soon as they get an alert via smartphone.

Picup has 2,500 drivers on motorbikes, in cars or in vans, who are connected to a Picup system that alerts them when a parcel has arrived in a hub and needs to go out. The end customer can also see where their parcel is in real-time by connecting to the Picup app. This makes the entire experience user-connected.

Stor-Age spokesperson Chris Oosthuizen says Covid-19 has completely reshaped the online retail space, with a significant increase in the volume and demand for last-mile delivery.

“Our national footprint of over 55 stores provides the perfect property overlay to give last-mile delivery partners such as Picup the perfect springboard to vastly improve on their logistics strategy.”

Bruni also has aspirations to enter the electric vehicle space and is currently piloting a proof-of-concept idea in Cape Town. Both Picup and Stor-Age intend to cut carbon emissions as far as possible from their fleets, and the fastest way is by upgrading some of their bikes and erecting charging stations that are solar-powered.

Bruni says: “We want to play our role in the green economy and have an electric vehicle footprint up and running once the concept is proven, where we can morph our current fleet gradually over time to our hubs, where it’s viable.”

“The tech that drives the consolidation, optimisation, collection and delivery of parcels through the hubs is what drives everything. We intimately understand the last-mile and how it is connected to our customers’ distribution experience for their end-user and intend to rapidly grow our footprint in this space.”

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