Local Matters: The Impact Of Geofencing On Deliveries

Efficiency in home deliveries has become one of the most valuable assets for companies looking to grow their businesses. Why? Consumer expectations in last mile delivery keep growing, with almost 72 percent of retailers implementing same-day delivery operations and 56 percent shipping their products worldwide.

Logistics managers are pushing their fleet’s capabilities to the limit, looking for innovative ways to guarantee their delivery promise and reduce home delivery failure rates as much as possible — a necessity in the Amazon age. Over the years, the transportation and delivery industry became one of the most expensive channels for most logistics companies; consequently, technology has proven to be an excellent ally to keep those cost at the minimum and improve the overall experience.

Technology in supply chain operations is not a novelty, and today these processes have been enhanced even more by the use of smartphones and mobile web. As such, one concept in particular has gained attention from logistics managers: Geofencing.

Geofencing technology is used to create a virtual barrier around an object — e.g. Vehicles, Packages, Persons, etc. — that is tracked and monitored through GPS in defined, real-world geographical boundary. It’s usually thought of as a way to deliver ads or messages to mobile consumers within a particular radius, but from a logistics perspective, it’s an invisible “fence” created by software and hardware devices across a targeted object that is part of the supply chain operation.

The objects, in this case usually vehicles or packages, which are tracked inside the delineated area, and notifications are sent if they leave the geofence perimeter. The technology is already used by large companies like Amazon or Wal-mart to track and monitor their assets, and it gives the organization the ability to respond in real-time to potential delivery problems.

To meet consumers’ delivery expectations, companies should achieve a better management of packages and goods movements, from warehouses to providers or customer homes. Geofencing provides the ability to mark those points as POI (Points of interests), monitor the vehicle’s movements around these points of interest, and communicate in real-time the status each delivery. There are three main areas where geofencing can make a difference in delivery operations:

Real-Time Alerts to Customers

A tracking system can be an excellent investment to improve customer satisfaction levels in your delivery operations. This is because, with a system like that in place, managers can quickly set alerts to notify customers when their packages enter their POI zone and notify an estimated time of arrival. As the shipments are delivered, the dispatcher can directly notify the customer by pressing a button in the mobile app. This notification called “pre-delivery” will send a SMS or email message to the customer to be prepared to receive the shipment at home. This simple action could reduce the “Failed Deliveries” shipments by up to 25 percent, according to Beetrack statistics.

Real-Time Alerts to Managers

Alerts and notifications can be configured to provide real-time information about route problems and help companies ensure a more seamless delivery process. Research from Georgia’s Institute of Technology on “Supply Chain Glitches and Operating Performance” shows that companies that experience supply chain delivery glitches report on average 6.92 percent lower sales growth and10.66 percent higher growth in cost.

Improve planning and schedule success rates

Things don’t always go according to plan, but a geofencing system can be a good approach to understand and fine-tune efficiency in delivery operations and customer service. From previous reports, logistics operators can learn which are the time frames that work best for their delivery, reducing failure rates and improving location planning.

Drones delivery programs Amazon, DHL, and other large enterprises are already working on one of the most promising technologies in home delivery: drones. Drones are expected to become one of the most popular consumer distribution trends in the next five years, despite the regulation and technological barriers that still lurk on the horizon. Software companies are developing geofencing and collision avoidance technologies in the drone space to accelerate the adoption rates and ensure regulatory improvement. As Business Insider states, “Safer technology and better regulation will open up new applications for drones in the commercial sector, including drone delivery programs like Amazon’s Prime Air and Google’s Project Wing initiatives.”

There is a strong potential for new approaches using geofencing technologies, and companies can take significant advantage of that progress. Managers can rely on a system that prevent risks, improves customer service in the “on-demand” age, and lowers failed deliveries.

*Sebastian Ojeda is the CEO of Beetrack.