Challenges in Last Mile Logistics: Payment on Delivery

2 min read

Many imagine all is done once e-commerce retailers pass their products to couriers for delivery. But the real challenge of last mile logistics begins here. On many occasions, couriers fail to deliver products and return them to their origin. 

Failed attempts means wasted time and resources as couriers end up making unsuccessful trips to customers’ houses. They hurt the success rate – the percentage of deliveries that are successfully made at the first attempt – and make the overall last mile experience inefficient. Yet they are common in the UAE due to the high demand for Payment on Delivery (PoD).  

| Payment on Delivery 

According to data collected by Payfort, the UAE’s e-commerce penetration rate is 67%, which is higher than most MENA countries. The country also has more than 5 million credit card users, making the process of online payments much easier. However, many people still opt for PoD when they shop online since they find it more convenient and trustworthy to pay when they receive the product in hand.  

What does it mean for last mile logistics? It means a lower success rate. When a customer opts to pay on delivery, the courier must collect payment from the customer in order to make the delivery a success. If the customer is not available when the courier reaches their location, the delivery attempt is unsuccessful.

PoD will gradually decrease as more and more people migrate to online payment methods. But it will continue to exist.   

| Solution 

swftbox’s AI engine intelligently predicts a suitable drop-off time for PoD orders. Existing data on past deliveries is analyzed to make such predictions, and they will become more accurate over time as more deliveries are processed through the engine.   

swftbox also features automated scheduling. Once a delivery request is placed on swftbox, the customer receives a note to schedule the delivery time through SMS. The delivery slots made available to the customer are generated by swftbox’s AI engine based on the demand pattern of the rest of the orders for that day so that couriers can complete efficient routes. The delivery slot selected by the customer is then shared with the courier, increasing the likelihood of a successful delivery.

These two features amongst other tools have enabled swftbox to maintain a relatively high 78-84% success rate for PoD orders. In comparison, success rates for prepaid orders is in the range of 94-98%.       

*This article is the second part of the three-part weekly series.