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In today’s Last Mile Brief, we bring you this piece by Last Mile Experts’ Marek Różycki on the latest generation of parcel lockers in Finland.
Matkahuolto, the leading Finish bus/passenger travel platform, has been delivering not just people to their destinations but also parcels for some time now.
Initially, they have been focused on PUDOs but are increasingly keen to leverage the power of the parcel locker. Matkahuolto has been part of Smartmile’s open network since 2018, and together, the companies have expanded locations to include all of the carrier’s original bus terminals.
One of the biggest challenges in lockers (also on a sustainability level) is overflow caused by limited capacity. Moreover, in a shared system, getting a real-time understanding of volume influenced by consumer pick-up behaviour and the different plannings/routes of all connected couriers is nearly impossible. As a result, couriers often arrive with several parcels yet not enough compartments or compartments of the right size to store them. The inability to deliver can lead to disappointed customers, couriers driving additional kilometres, and a possible redirection to other locations where the same uncertainty exists.
Now, after five years of collaborating, Smartmile has initiated the development of a capacity and reservation feature for their lockers which allows the locker operator to give certainty to the courier of what volume can or cannot be processed per locker location by being able to:
- Divide the machine into assignable dynamic capacity, allocating a set of compartments of different sizes to different couriers or retailers.
- At an agreed time, couriers or retailers announce their parcels of the day,
- Smartmile’s system cross-checks the request against the assigned compartments, and gives immediate positive or negative feedback for the availability of the correct sized compartment.
- The courier or retailer accepts, and the system reserves the compartments temporarily.
- Smartmile continues accepting customers’ returns in carrier-reserved compartments.
- The company always keeps a part of their machine’s capacity unassigned as part of its open network philosophy.
The patent also includes an AI-based algorithm and machine learning. Based on both consumer and courier behaviour over time, the tool will provide preliminary feedback predicting the occupancy status of a locker for the requested delivery time by the operator. Moreover, partners can decide based on which probability they want to accept preliminary reservations.
The new (patent pending) capacity feature finds its roots in the first trial cases with Matkahuolto starting in 2020, which the company based on hard-allocated locker capacity. This trial ran for three solid years. Smartmile will implement the dynamic integration with Matkahuolto in Q3 2023 and continue to optimize collaboratively.
This technology is really cool as it allows the operator to create a virtual locker space within an existing machine and manage it dynamically. This ability to split lockers into individually operating segments with clear data separation will serve the existing business well and be great for retail-operator partnerships in which the retailer wants to „own” part of the machine’s capacity for their own customer returns or e-commerce activities.