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Parcel Lockers Chicken and Egg

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Parcel Lockers – If we build it, will they come? YES, if we feed the chicken!

With the noticeable exception of China, parcel lockers have not become a core last mile delivery solution.  Recently new ventures and initiatives have been launched in Europe and the US, but in my opinion, they are subscale and likely to fail.

This comment does not apply to Amazon, which is building a large-scale parcel locker network that gives them a competitive advantage.  They made the decision that they would build it, and they would come, and have been proven correct.

It is acknowledged by experts in this space, myself included, that a viable solution is only possible if the parcel carriers agree to work together and build an open network that all can use.  This is a shared investment in last mile infrastructure with the shared benefits to the carriers and all other stakeholders.  The decrease in traffic congestion and emissions by the reduction of thousands of vans, increased convenience to consumers, increased sales by retailers and lower delivery costs are the benefits this shared network would deliver. 

These benefits are clearly articulated at www.yorbox.com, which was developed by John Brown @mrjohnbrown. His model shows a $40 billion value creation in the UK with a reduction of 25,000 vehicles.  This would require an investment of $70 million and would deliver very healthy profits. (disclosure:  I’ve known John for 35 years, and have worked together on prior business ventures).

So, back to the chicken and egg question…how to motivate the stakeholders to support such a solution.  Money, or more precisely an incentive by means of a tax of $.05 to be paid for home deliveries.  In London alone, where there are 500 million annual deliveries, this would generate annual income of $20-$25 million, more than enough to fund the required investment. All the stakeholders would have a financial motivation to promote and use the parcel locker network, and the benefits of building this last mile infrastructure are so substantial, that I believe it is something governments should seriously consider.

Looking forward to a robust discussion on my proposal.

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