Crowdsourcing Logistics

Definition

Crowdsourcing, based on the concept of shared economy, uses online systems to match excess and underutilized resources to demand.

Through the application of technology that integrates idle human resources, Crowdsourcing logistics creates a cost-effective logistics system.

Crowdsourcing refers to that with the use of network or mobile end, matching the express needs and idle supply scattered around.

Background

With the advent of the mobile Internet era, more and more restaurants, retail enterprises to achieve online and offline seamless and depth of integration, city distribution, especially the end of the last three kilometers of business orders surge, the traditional logistics industry have great difficulty to deal with such a large single volume of business every day. What’s mor self-built logistics and cost are facing a little too high a problem, so the trust-based crowdsourcing model become the best way to solve the delivery within a city.

Logistics ushered the “Internet + logistics” at the best times, but also redefine the meaning of time and cost.

However, crowdsourcing is still a new concept in China. Until recently, the company launched the public package of logistics services.
Crowdsourcing Logistics has a variety of potential problems such as cargo security, legal liability, debt and corporate reputation. But with the crowdsourcing logistics gets more and more mature, it will bring far-reaching impact on the traditional express industry.

Moreover, the rapid development of e-commerce and O2O, Crowdsourcing logistics will become the next big trend, Crowdsourcing logistics for the last mile to facilitate the delivery, or help the development of O2O business.

Operate Mode

When consumers needs to send the same day delivery service, the most effective way is to work outsourced to the courier.

If the consignee places a order of delivery service though moblie phone APP, the crowdsourcing logistics platform will send orders to the courier who apply for the order successfully and give the delivery destination. Similar to Uber, the first courier to grab the order is responsible for delivery, the courier will be rewarded once he finishes the order.

Examples

• Wal-Mart
  In 2013, Wal-Mart for the US online customer trial delivery of crowdsourcing.
  Wal-Mart outsourced some of its shipping orders to its own customers who could ship goods for those place order on Wal-Mart’s website when they returned home after the shopping in store. These “couriers” can get a discount that would be enough to offset the cost of fuel.
  Through this method, Wal-Mart has make customers become a courier, while its many stores to become a store’s distribution center.

• JD.com
  JD Zhongbao refers to the public delivery of services provided by the JD. JUst like other crowdsourcing logistics services, anyone can become the JD courier.
  Jingdong home is the first O2O service platform launched by JD. In 2015 May, the service carried out in Shenzhen, Jingdong home users can shop in the local online supermarket or order online take-away service, and then experience the service from Jingdong home part-time courier .
  At present, users in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Nanjing can enjoy the service.
  JD that Jingdong home services will be further extended to the country and extends the category.

Advantages

Crowdsourcing logistics features in matching the enterprise and people who has spared production capacity, hoping to achieve a win-win situation.

• Crowdsourcing logistics can help companies reduce logistics costs, especially the last mile of the distribution costs. At the same time, it helps meet the growing demand for e-commerce logistics, which demand a number of logistics capacity at promotional festivals in particular.

• In addition, the company can save a lot of money, because they don’t bother to maintain cars, hire warehouses, pay salaries and benefits on a regular basis.

• For part-time courier , they can work anytime, anywhere, so that the delivery process becomes more flexible.

• From an environmental point of view, Crowdsourcing logistics can help alleviate traffic congestion and reduce the number of vehicles.

• From a social point of view, crowdsourcing can provide jobs for people who are unable to work full-time or who want to earn extra money.

Disadvantage

As the matter of fact, crowdsourcing logistics also has its shortcomings and uncertainties.

• Crowdsourcing logistics services can be less reliable than the traditional courier service, a number of security issues still need to be settled, including theft, fraud, parcels damaged or overdue delivery and other issues, and who to bear the responsibility is not clear.

• Privacy issues are also should be taken into consideration, such as the retailer’s sharing address and consumption habits of the customer with the stranger, which have the opportunity to pose a threaten.

• Crowdsourcing also has additional expenses such as insurance, litigation and training for part-time employees. Crowdsourcing logistics companies need to provide training for couriers to ensure the quality of service, but courier turnover rate is so high that it increases the training costs. Companies need to consider whether to maintain a large number of stable part-time employees.

• In addition, the management of scattered human resources around may also be another challenge.

Conclusion

With the crowdsourcing logistics becomes more and more mature, There are chances that it will become the trend of high-profile.

E-commerce and the rapid development of O2O lead to the increase demand of retail logistics services, but so far, the last mile of the delivery of many retailers and Electricity business platform is still quite bothering.

Crowdsourcing logistics model may be able to help solve the problem of delivery in remote areas.
However, given the potential risks and uncertainties involved, companies should weigh the pros and cons of testing this new model.