By Lynne Thornton, Director and Co-founder, Groundfloor Parcel Lockers
With Australians reported to have spent almost AU $64 billion1 online in 2023, it is no surprise that e-commerce spending is the new normal. In fact, Australia is now the 10th largest e-commerce market in the world with more than 40 parcels delivered per person every year. We have all played a role in the rise of its popularity but when we look more closely at consumer behaviour in the wider e-commerce space, we are seeing some interesting developments.
As consumers have become more conscious in their purchasing decisions, due to the increased cost-of-living, the second hand, or recommerce (reverse commerce) economy has exploded. Now valued at over AU $60 billion, platforms such as Facebook Marketplace, eBay, and Depop, are leading the charge, and are quickly becoming the go-to for customers who value cost effective and sustainable options.
Regardless of consumer preference for either the new or the second-hand goods market, the reality is they are both here to stay, which poses the question. How can our parcel delivery infrastructure keep up with this rapidly growing e-commerce landscape?
The last mile of any delivery is the most complicated and time intensive. Couriers have to contend with unfamiliar addresses, inadequate parking, floor-to-floor travel, and the process of obtaining signatures. When these factors lead to a failed delivery, the cascade of problems extend well beyond the frustration for the recipient.
The flow on effects of repeated delivery attempts are significant, they add expense, inconvenience, congestion and increase the carbon footprint of the delivery process. In fact, in a recent study, the University of Melbourne found that the package redelivery process is responsible for almost 90K tonnes of C02 just within the Melbourne CBD annually.
A recent report by Hubbed highlighted how consumers are attempting to address this phenomenon, with 65% of the shoppers who were surveyed opting for same day delivery in order to increase the certainty of delivery times2. This further underscores the consumer’s propensity to spend in order to avoid the woes of an uncertain last mile delivery process.
As the cost-of-living continues to rise, same day delivery is not a viable long-term solution for all consumers.
The Global Landscape
With larger populations and higher density living, what are the best practices globally for last mile delivery?
Cities across Europe, North America and Asia have been adopting the use of parcel lockers to alleviate the implications of the burgeoning e-commerce revolution. In Europe, logistics operators, courier companies and retailers alike are addressing the last mile problem together through shared, public locker networks. There are more than 150,000 locker collection points currently in Europe, operated by a series of independent and courier centric networks, allowing consumers to direct parcels to a public point for 24/7 collection at their convenience.
Polish-based courier, InPost, is the European leader in smart parcel lockers and integrated logistics. The 2023 InPost Annual Report highlights their continued dedication to driving innovation for the last mile, aiming to achieve carbon neutrality by 20403. By using parcel lockers to create points of delivery density, InPost was able to reduce their last mile delivery emissions by 180,000 tonnes in 2020. Their investment in locker infrastructure has also enabled more predictable courier routes, facilitating the transition to electric vehicles further minimising carbon emissions.
Across the Atlantic, In New York City, a pilot program for a public locker network has been launched in collaboration with Go Locker. With over 6.6 million deliveries made each week, the city recognised the urgent need to enhance delivery infrastructure—reducing traffic from delivery vehicles and addressing the estimated 90,000 packages stolen daily4. Similarly, Tokyo has also embraced the use of a public parcel locker network to help manage the rapidly growing e-commerce market. Pack City, the leading courier agnostic parcel locker company in Japan, has over 6,800 lockers installed across the country in a variety of public spaces including subway stations, supermarkets and pharmacies5. With over 1600 lockers servicing the bustling Japanese capital alone, initial results have been promising, with 97% of users reporting that they were satisfied with their experience6. It is expected that the network will continue to grow for the foreseeable future.
Closer to home, the island of Singapore is no stranger to the public locker concept, having launched public locker initiatives into the market as early as 2013. More recently however, Pick Network have launched 1,000 public parcel lockers conveniently located within a 5 minute walk of Singaporian heartlands including housing blocks, community clubs and public transport depots.
What about Australia?
Despite significant advancements in last mile delivery abroad, Australia has yet to see a major public network emerge. With over 1 billion parcels delivered annually, there is considerable opportunity for early adopters to take the lead, and shape Australia’s delivery infrastructure.
Currently, Australia’s delivery framework is dominated by private building delivery infrastructure, and Australia Post’s locker network. Whilst Australia Post leads the public sector, its network lacks the capacity to accommodate other couriers and fulfil the needs of consumers.
Despite these advancements, a more comprehensive, shared solution is crucial to effectively address the challenges of last mile delivery.
In order to reduce last mile delivery costs and increase delivery efficiency, locker systems should be shared or open to all couriers for delivery. Creating points of density improves delivery efficiency, eases congestion, and improves sustainability. Consumers also benefit from reduced parcel theft, increased convenience and more delivery choices.
With e-commerce continuing to grow exponentially, it is time for Australia’s delivery infrastructure to grow and adapt. A world where couriers can securely deliver packages in seconds should not just be a customer expectation, but a global norm.
About GroundfloorTM
Melbourne-based Groundfloor provides smart delivery lockers for managing deliveries in residential, commercial buildings and mixed-use developments. Groundfloor systems accept deliveries from any delivery company or retailer, so tenants can provide convenient delivery and collection of parcels, mail, dry-cleaning and more. Groundfloor is integrated with leading portal companies forming an integral part of the smart building movement. Learn more about Groundfloor: https://groundfloordelivery.com/.
[1] Source: 2024 Inside Australian Online Shopping: e-commerce Industry Report
[2] Source: HUBBED The Rise of Delivery Choices 2023
[3] Source: https://inpost.eu/sites/default/files/2024-03/IAR%20InPost%202023.pdf
[4] Source: https://www.nyc.gov/office-of-the-mayor/news/266-24/mayor-adams-dot-commissioner-rodriguez-launch-lockernyc-combat-package-theft-reduce#/0
[5] https://www.parcelpending.com/en-us/case-studies/open-locker-network-japan/
[6] https://www.quadient.com/en-int/news/Quadient_has_reached_new_milestone_20000_parcel_lockers_units
