Revisiting the Last Mile Amidst COVID-19
Back in 2018, we co-hosted a webinar with Fleet Owner magazine on the topic of last mile logistics and its impact on vehicle maintenance. At the time, the industry was just coming to terms with the growth of e-commerce and its transformative effect on freight transportation, with particular emphasis on the final logistical leg in the journey of an online purchase to the customer’s door.
Now, given the COVID-19 pandemic and its impact on online retail, this topic clearly merits another look. Overall, the impact of the pandemic could be described as neutral. On the one hand, consumer e-commerce has experienced an enormous surge in activity, as communities across the country and around the world adapt to social distancing and stay-at-home instructions from health officials. March and April 2020 reportedly saw an increase in online orders and revenues in North America at a rate of 70% to 100% over the same period a year ago. With local brick-and-mortar retail stores forced to close for an extended time, the mix of products that consumers and businesses are buying online has expanded to virtually all categories.
Many experts believe that this is not just a temporary spike in e-commerce activity, but the beginnings of a permanent shift in consumer buying behavior. Consumers in record numbers have experienced the ease and convenience of online shopping and home delivery, for everything from big-ticket appliances to daily necessities. E-commerce may well be yet another example of the “new normal.”
Conversely, some areas of last mile activity have suffered, notably those delivering to the urban business community, such as food catering, office supplies and furniture, and wholesale delivery to stores.
Additional long-term changes brought about by the pandemic should become clearer over time. Social distancing and hygiene practices, for example, are likely to have an impact on handling procedures in warehouses and fulfillment centers, which could mean slower delivery times. It may be a while before people return to public transit and ride-hailing, meaning more private cars on city streets, potentially worse traffic and more pressure on delivery windows.
In any last-mile scenario, vehicle reliability becomes of the utmost importance. Fleet operators riding the e-commerce boom need to know they have the capacity to meet the growing demand, while those in sectors facing pressure must ensure they can remain competitive. All of this simply amplifies the need for truck and van fleet operators to update their maintenance programs. The last mile presents more stressful operating conditions, more stop-and-go traffic, more braking and turning, higher fuel consumption per mile, and more idling. With many fleets delaying new equipment purchases and truck OEMs suspending production, fleet operators will be under pressure to get optimal performance and service life from their existing assets.
Chevron continues to work with OEMs and fleet operators on lubrication and maintenance solutions to help meet these challenges. We salute the fleet managers, dispatchers and drivers who are putting in extra hours and working on emergency footing to meet the demands of this crisis while coping with supply chain disruption. We look forward to your feedback on these issues and how they are affecting your business.