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E-commerce boom reshaping delivery landscape

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Logistics needs to keep pace with e-commerce growth

Missed deliveries, lost packages and delayed shipments are the bane of every online shopper.

And these problems could continue, if urgent steps are not taken, warn logistics players.

One measure already in the pipeline is a partnership between the national postal service SingPost and some of its rivals, to offer customers the option of receiving purchases through any delivery node in the network. Called The Last Mile Platform, it will be rolled out next month.

Such alliances may be unusual. But it cannot be business as usual.

SingPost saw its postal system strain under the pressure of the year-end holiday season.

Its volume surged by 30 per cent - double what it expected. Already, during off-peak periods, it delivers an average of 3 million items a day.

And this unprecedented volume of deliveries, predicts SingPost group chief executive Paul Coutts, will become the new normal in six months.

According to a 2018 study by Google and Temasek, Singapore's e-commerce market, which stood at US$1.8 billion (S$2.43 billion) last year, is predicted to grow to US$5 billion by 2025.

There are now dozens of operators offering thousands of collection points across the island. But the market is fragmented and messy, while intense competition for resources calls for more industry collaboration, players said.

Parcel Santa, which provides parcel locker services to 300 condominiums in Singapore, started in 2017. Co-founder Jim Huang said that while traditional retail relies on malls and shops as consolidation points for goods, online shopping sees the delivery of goods to individual doorsteps, which is unsustainable.

The only way for logistics to keep pace with e-commerce growth is to re-establish "consolidation points" such as parcel lockers, he said.


While there will always be demand for doorstep deliveries as a premium service, he said the future blueprint for last-mile delivery in Singapore will likely be a hybrid model that will include lockers and community-based deliveries.

Courier services are also finding ways to beat the manpower crunch and reduce missed deliveries. Ninja Van, for example, has a network of about 1,000 pick-up and drop-off points, including neighbourhood shops, in addition to offering doorstep deliveries.

Some operators feel there should be greater collaboration within the industry, particularly during peak seasons.

The Last Mile Platform as well as Locker Alliance are leading the charge to create a more cohesive delivery network in a space that is highly competitive, where some players are at risk of suffering losses.

It is a move to integrate partner courier services, parcel lockers and collection points in all South-east Asian countries, and allow retailers to offer customers the option of receiving purchases through any delivery node in the network.

SingPost is also part of the Locker Alliance, a government initiative to break down the barriers of locker operators having separate computer systems and tie-ups.

A year-long pilot was rolled out in December which lets customers of online retailers such as Lazada and Qoo10 have their items delivered to any of the 62 locker sites at Housing Board blocks in Punggol and Bukit Panjang, as well as at eight MRT stations.