Tech Giant Enters the Delivery Sector

As many courier firms and self-employed delivery drivers will know, the move to more and more consumer purchases being made online for home delivery has been something of a phenomenon in the last decade or so. Although the pandemic certainly sped things up in terms of the numbers of UK consumers turning to online sales – not least for groceries and perishables – the fact is that the likes of Amazon have been growing the demand for multi-drop delivery drivers in the e-tail sector for some time. So far, there have been some notable successes in this marketplace – and some failures, too. Hermes, for example, recently announced a significant investment in rebranding itself following a sustained dip in its reputation in the home delivery market. That said, there is a new player in town because one of the world’s biggest brands, Google, announced in March that it would also be entering the sector, albeit in a new way.

Rather than competing with delivery firms directly, Google has said that it will work its way into the delivery sector by providing business tools for those already operating in it. As such, Google is saying it is going to operate as a tech player rather than a driver in the market. Rather like Uber in the taxi market, its recently announced offering won’t directly compete with pre-existing firms but it could make for significant upheaval in the owner-driver marketplace and among smaller courier operators if the uptake of its new tech is widespread. This will, of course, come down to how useful it is for courier firms in practice. Those that find it gives them an operational edge by shaving minutes off delivery times are likely to advocate for its wider uptake in the industry, especially if it helps them to operate more independently and with more control over a typical day’s workload. So, what are the tools Google is planning to reshape the sector with? Read on to find out.

To begin with, Google said that not one but two new tools for businesses that operate with delivery fleets would be made available. These will make use of artificial intelligence systems that update with new traffic data as it is being collected by other Google users on the road. The Last Mile Fleet Solution is the first of these two systems. To be clear, many drivers will probably already be familiar with the scope of this system because it is an adjunct to the already widely used Google Maps platform. The idea with this route planning tech is that it will emphasise how drivers can optimise every stage of the so-called last-mile delivery process. Not only will this assist with route planning as conditions change but, according to the California-based tech giant, it will cover everything from ordering a consignment despatch by the supplier to its delivery to the door. Google isn’t hanging around either, because it said that this software solution is already in its public preview stage of development.

The second offering Google has announced will soon be launched is called Cloud Fleet Routing API. As the title of this software system suggests, the new routing application programming interface – or API – will focus on route planning across a fleet of multiple delivery vans and trucks. As such, it will still be impactful for smaller courier firms as well as self-employed owner-drivers when they are working for a larger firm, operating in concert with other drivers working similar patches and routes. The Cloud Fleet Routing API will be part of Google Cloud, the firm’s online data distribution service, when it launches. According to Google’s spring statement, the fleet routing system will be made generally available to subscribers sometime in the second quarter of 2022 barring development delays. As such, it could be playing a significant role in the way British-based delivery companies operate within a matter of months.

However, because both of the proposed software systems are classed as enterprise services, Google has yet to put any pricing information about them into the public domain. Anyone who wants to know what the cost structure will be will need to talk to Google’s sales team directly. That’s fairly unusual for a business like Google that tends to make one-size-fits-all business and consumer solutions, leading some to speculate that the tech giant is feeling its way in terms of pricing to try and determine exactly what the market will bear.

Hans Thalbauer, the managing director for Global Supply Chain and Logistics Industries at Google Cloud said that the coronavirus crisis had further accelerated both e-commerce purchases and the number of deliveries that were needed to sustain them. Acknowledging that the sector had already been ‘growing rapidly’ before the pandemic, Thalbauer said that the current strain on delivery networks had impacted negatively on ‘delivery time and success’. The Google bigwig went on to add that the industry faced other constraining factors, such as driver shortages, factory closures and poor address data acquisition. He specifically mentioned that the recent increase in fuel prices have also led to operational difficulties within the sector.

“With Platform’s Last Mile Fleet Solution by Google Maps as well as our Cloud Fleet Routing API, we have found a way to make it easier for delivery fleet operators to operate,” Thalbauer said. “[These systems]…address the sort of issues [they face] and create seamless experiences for drivers, fleet managers and consumers alike,” he added. According to the director, the Google Maps Platform already has a level of functionality that can help. Pointing out that the On-demand Rides and Delivery solution exists within Google Maps already, he said that what the new Last Mile Fleet Solution would do would simply build upon the success of an already established online service. As such, this system is aiming to help delivery businesses that provide on-demand drivers, often at late notice.

On the other hand, the Fleet Routing API is aiming to serve a different market. Furthermore, unlike the Last Mile Fleet Solution, it is a completely new Google Cloud service. Designed to help courier firms, hauliers and businesses that run their own in-house delivery services, it is primarily tasked with optimising daily route planning. According to Google, subscribers to the service will be able to utilise it to build their own set of tools for the purpose of internal fleet management. As such, users will be able to make use of it to come up with delivery routes based on any circumstance or one-off constraints that might need to be factored in. Google says that this could include things like the time window that a delivery might need to be made in or the weight of the package(s) that is being sent. Furthermore, users will be able to adjust their settings to account for specific vehicle capacities. Crucially, Google thinks that this won’t just enable fleet managers to optimise the routes their fleet will take for improved customer outcomes but to help them hit their sustainability targets, as well.

According to one UK-based courier service that has been trialling the two systems for Google, Paack, the services have allowed them to scale up their operations quickly. The firm has already adopted Last Mile Fleet Solution and Cloud Fleet Routing and says that this means its drivers and fleet managers are now able not only hit peak efficiency but to maintain it. As such, they reckon it has allowed them to improve on their already high on-time, first-time delivery rates. Google says this is possible because the improved routing and in-app navigation that is offered while drivers are on the road is shared back to fleet managers. Furthermore, the full-day view that is built into the system allows drivers to plan their stops for the entirety of day but is flexible enough to be adjusted when needed.

Of course, the question many drivers, fleet managers and courier firm owners will be asking themselves is whether the two systems are capable of living up to the hype. Certainly, Google is a big name with a big reputation for user-friendly and intuitive tools. That said, the company is not the only big tech player in the sector. In January, the US wings of Microsoft and FedEx jointly announced a partnership they were entering into that aimed to assist retailers with the streamlining of their last-mile logistical operations, as well.

As such, it may be only a matter of time before a similar, courier-focused offering is introduced by Google’s big rival in the field of multi-drop logistics. Shopify and Amazon both have similar systems in their current operation, too. To put it simply, there is a lot of activity to take note of in terms of tech and delivery operations but the market has yet to coalesce in one direction or the other. How much Google will shape the future in this field is – as yet – anyone’s guess. What is known is just how many resources it has at its disposal to capture a significant share of the market if it gets its pricing right.