Algorithm-based transport management systems and data learning technologies are becoming essential in the last-mile delivery race in the United States. Last-mile delivery services are now key to the growing e-commerce market, as more consumers shop online and order their goods from home.
According to McKinsey&Company, the cost of global parcel deliveries amount to about $70 billion a year, with Germany, China and the United States accounting for more than 40% of the market. Not only is the market huge, but it’s expanding, with annual growth rates of between 7% and 10% seen in markets like the United States, and in others by more than 100% in recent years.
With the increase of e-commerce, consumers have become extremely important to the parcel-delivery market, which was once dominated by businesses. Consumers now choose their product provider based on the quality and speed of the delivery services they provide. Retailers are working hard to deliver the best solutions and offer effective delivery services.
A new algorithm developed in South Korea, named Vroong Engine, is set to revolutionize the market. It’s designed for high logistics efficiency for clients by applying mathematics to the costs and risks of delivery services. According to the founder, delivery firms are essential to providing high-quality, on-time services at reasonable costs. The Vroong algorithm reduces the headache for these providers by allowing “multi-loading of parcels with different destinations in accordance with a deliveryman’s capacity and the income he or she wants to earn”.
“multi-loading of parcels with different destinations in accordance with a deliveryman’s capacity and the income he or she wants to earn”
According to the Korea Herald, there are currently around 13,000 motorcycle drivers used for the delivery service in Korea, using both freelancers and full-time workers, to cater for the growing need for delivery speed. Vroong technology is helping to streamline and improve operations in Korea, and the business has become so successful that it is set to expand into other markets.
A newly signed partnership with Singapore has seen Vroong expand into other territories and the service will soon appear in Japan and Turkey, other territories like China and the United States are strong possibilities for future growth.
The firm’s ultimate goal is to develop the technology as a logistical platform that operates on its own, which allows the customer to search through an all-encompassing internet search engine, then have their item delivered through the same platform.
It takes bold ideas like these to revolutionize the already successful e-commerce market, and to ensure online retailers can deliver their goods as quickly as possible.