The rise of online shopping has reached an unprecedented level. People can now order a wide range of items, from food to clothes, with just a few clicks and taps from the comfort of their homes. The world of instant gratification has enabled e-commerce sites to reach their peak, putting immense pressure on the delivery systems. Companies and logistics firms are competing on who can deliver faster and cheaper while facing the issues of rising costs, urban traffic, and eco-friendliness concerns. Against this backdrop, crowdshipping is poised to become the next major player in delivery, particularly in the last mile. 

Read also: Last-Mile Delivery Challenges and Innovative Solutions

Crowdshipping defined

But what is crowdshipping? In its simplest definition, crowdshipping is a business delivery model that uses mobile and online platforms to connect shippers with private individuals who are available and willing to deliver. In a normal scenario, a business has a dedicated delivery system to transport the parcels to the customers. They usually have a fleet of trucks, vans, and riders, as well as other forms of transportation, to handle last-mile deliveries for them. Meanwhile, crowdshipping takes a 180-degree turn and taps into “the crowd” to do the delivery for them. These crowds may comprise everyday commuters, cyclists, private cars, part-time couriers, and even pedestrians. 

Imagine you’re driving from your workplace in the city to your home located in the suburbs. In the middle of your drive, you receive a mobile phone notification that a parcel is available for delivery to an area on your way or near your home. Without changing the course or adding long hours to your travel, you can earn extra income. Crowdshipping takes inspiration from the sharing economy concept, similar to some ride-sharing platforms. Instead of sharing rides, private individuals are sharing the logistical responsibility while being compensated by the company, a modern spin on collaborative consumption where underutilized resources are used for maximum efficiency.

Crowdshipping vs traditional delivery

Traditional delivery operates using a fleet of delivery vehicles to carry the parcel to the customers. This delivery method is the most common type as it leverages logistic firms such as DHL, FedEx, or UPS to complete the last-mile deliveries. All logistics concerns, including areas, routes, drivers, staff, and costs, are covered by the logistics company. 

On the other hand, crowdshipping takes advantage of the transport and delivery capacity that already exists. A private car, a cyclist on his morning ride, or someone riding on a train can complete the delivery without having to use a separate vehicle or create a new trip. 

Crowdshipping methods

The crowdshipping delivery model is not a one-size-fits-all since the required transportation for the last-mile delivery differs from one place to another. 

Private Individuals

Deliveries being made by private individuals are the most common mode for crowdshipping. Similar to carpooling, parcel carpooling allows individuals to accept deliveries along their planned routes. There are several mobile apps and online platforms, such as Shopopop or Peer Connect, that link users with people who need assistance with their deliveries. 

Corporate Crowdshipping

You might think that crowdshipping is exclusive to private individuals, but some businesses are sharing logistic resources. Two or more companies can collaborate and decide to share trucks, vans, fleets, drivers, and riders to avoid the cases of half-empty delivery vehicles, giving them a chance to optimize delivery schedules while cutting down expenses. This setup combines the principle of the sharing economy with third-party logistics firms that can help businesses deliver their goods efficiently on a larger scale. 

Public transportation

In areas where public transportation is effective, some private individuals can hand-carry the parcel during their commute. These passengers can also take advantage of the parcel lockers in train stations or bus stops, creating a customized distribution system without the use of delivery vehicles. 

Crowdshipping advantages 

The last mile, also known as the last leg of the product delivery, has been dubbed the most costly and inefficient part of the journey. According to research, this stage of the delivery process accounts for 50% or more of the total logistics costs. Some of the reasons cited are congestion, increasing traffic, and population growth. With this, crowdshipping delivery models offer a promising solution to the last-mile delivery problem. Given this setup, crowdshipping provides major advantages. 

Cost saving

One significant advantage is the reduction in costs, as businesses can lower their expenses on fuel, labour, and fleet maintenance, since most deliveries will be outsourced to individuals who are already travelling. The biggest advantage of this type of delivery method is its reduced carbon footprint.

Environmentally friendly

As companies and businesses strive to be eco-friendly, crowdshipping emerges as an ideal delivery model, as it reduces the number of delivery vehicles, thereby minimizing emissions and congestion. For businesses that are facing challenges with last-mile deliveries, crowdshipping is a promising option.

Saves time

Since customers don’t have to wait for the scheduled pick-up and delivery, some parcels may be delivered faster and more efficiently. When someone is available in the area, they can readily accept the delivery and carry the goods to the customer. In some cases, urgent deliveries and groceries can reach the customer within the next hour. 

Flexible and customized

A normal delivery follows the logistic firm’s schedule and availability. Backed by data, it was revealed that 73% of customers prefer a flexible delivery schedule over speed. With crowdshipping platforms, customers are given the freedom to connect with couriers in real-time, making the delivery time more personalized and by the customer’s schedule. 

Community engagement

Sometimes, it’s not all about doing business; it’s also about connection and engagement with the community. Several consumers admit that they are open to the idea of delivering parcels to their neighbourhood or community. This provides trust within the community while giving extra income opportunities. 

Crowdshipping disadvantages

While it presents a promising business potential, especially in the last-mile delivery, crowdshipping also provides some challenges and risks that should not be disregarded.

Trust

One big disadvantage of crowdshipping is the question of trust and security. Some consumers may feel uncomfortable about the idea of strangers handling and transporting their packages. Unlike professional carriers, private individuals do not possess the skills and training that professional handlers have. One way to combat this mistrust is for crowdshipping platforms to build stronger security mechanisms, such as verification, identification, ratings, and coverage. 

Regulation and legal liability

Since crowdshipping is not as established as the logistic firms, the legal framework is still not established. Customers raise several questions: When a package is lost, damaged or stolen, who is responsible? Who should be held liable? This area of the crowdshipping delivery system should be revisited to protect all the parties involved. 

Scalability

Crowdshipping is particularly applicable to urban areas with high traffic volumes. The problem arises when the customers are situated in rural and remote regions. This creates a challenge since trips to these regions are less frequent, limiting the chances of this delivery system reaching a bigger market.

Conclusion

Crowdshipping is part of a larger trend in modern business solutions: taking advantage of the community and underutilized resources to help solve complex problems. Just like ride-sharing and home-sharing models that have transformed the transportation and real estate industry, crowdshipping can provide an effective answer to the logistics sector, especially its last-mile delivery problem. 

Once properly regulated and integrated seamlessly into the existing delivery systems, crowdshipping has the potential to change the logistics landscape and deliver not only parcels and goods but also lower costs, lesser gas emissions, closer neighbourhoods, and more satisfied consumers.