Is the Gig Economy the Future of Last-Mile Delivery?

Last-mile delivery is one of the most critical aspects of the supply chain and logistics process. It requires extensive infrastructure, workers and resources to get packages to their final destinations. Over the last several years, the gig economy has proved to be a positive force in overcoming the industry’s most common struggles. Will it be the trend corporations need?

How Does the Gig Economy Facilitate Last-Mile Deliveries?

Suppliers have started to realize that contracting and hiring last-mile solutions are expensive and increase lead times. Because of the number of deliveries these workforces need to handle, deliveries may not get to their final stop on time. Last-mile labor shortages are also prevalent in numerous industries, where one study found truckers were short 80,000 drivers.

The — a system in which the workforce mainly consists of freelancers and short-term contractors (gig workers) rather than permanent, full-time roles — facilitates this and the other challenges employees have. Tenured professionals are retiring, demand is exceeding employees and drivers are transitioning to other industries for new work. Freelance workers allow deliveries to continue without interruption from these internal factors.

What Are the Pros and Cons of Relying on Gig Workers?

There are good and bad sides to relying on gig workers for this important task.

Pros

Eliminating resource-guzzling fleets from the equation could make last-mile deliveries more sustainable. Many logistics companies own diesel-powered long-haul trucks. These consume an immense amount of fossil fuels, whereas many gig workers are driving shorter distances.

Plus, they could be driving hybrid or fully electric vehicles, reducing environmental impact more. A supply chain’s impact is often 11.4 times more than the companies they support, so every reduction is worth it. Gig workers live closer to the destinations, too, so they are using fewer miles on their cars than haulers would.

Another advantage is these professionals are taking stability into their hands. Many truckers leave the industry because they feel overworked and underpaid. Gig work allows these experts to shave off hours while potentially making more money simultaneously.

Cons

Delegating tasks to gig workers has one major drawback, which hints at several others. Gig workers remove jobs from within the company, potentially putting those who have done last-mile deliveries for years out of work.

Gig workers are independent, which means companies cannot control them. Therefore, quality control, safety and transparency are uncertain in these final miles. Businesses assume these risks or must find ways to institute oversight through tracking apps or other process optimizations before products get to the last mile.

As many as seven million gig workers are dismissed by economic policymakers, which includes freelancers for popular apps like Uber and Amazon. This implies continually defaulting to gig workers could misinform legislative actions to protect and support these people — unless agencies find better ways to account for them.

What Does the Future Hold?

The  is not going to go away, but it might be supplemented by another helping hand — autonomous robots. Around 56% of American supply chain companies do not have enough staff. So, robots might be the helping hand supply chains need.

Public and private robots could decentralize last-mile efforts even more. A case study in Rome, Italy, discovered these robots achieved a 7.5% cost reduction when delivering drugs to pharmacies. The robots are capable of optimizing routing to make the path more direct and fuel-efficient, further promoting sustainability.

More people are shopping online, so the future also contains more corporations finding creative solutions to control consistency within the gig landscape. It is impossible to see how this will manifest, and it might be impossible. However, companies will try, especially if quality becomes compromised on a massive scale.

As gig workers take on more last miles, it is possible the trend could make the labor force denser than ever. If it becomes frictionless to sign up for an app like it is  , then the labor shortage could become a distant memory.

The Last-Mile Gig

While most of the effort of any package happens before the last mile, it is the one that counts the most. Harnessing as much power as possible to diversify the workforce, reduce emissions and streamline distribution is critical for meeting the stringent demands of a world obsessed with e-commerce. Corporations must consider transitioning or adopting a hybrid approach to the last mile, or meet obstacles as orders go through the.