The Rise of Peer-to-Peer Logistics
Thanks to the increasing ease of which users are accustomed to adopting newer technologies, creative delivery services are being developed that give all parties greater flexibility and options. A popular delivery trend that has been gaining traction over recent years is that of Peer-To-Peer (P2P) deliveries. It has become known as the ‘Uber’ of the logistics industry for its similarity to the popular self-service taxi application. Just like Uber transformed the taxi market, some are maybe concerned whether P2P will dramatically disrupt traditional logistics and transportation businesses.
While we’re still in the beginning stages of this emerging segment of logistics, P2P is certainly an inventive way to deliver goods and it fills a niche that has been previously underdeveloped. Digital platforms are breathing life into P2P services with the development of the platforms that enable the connection of the ‘senders,’ ‘bringers’ and ‘receivers’.
AFL recently had a great opportunity to explore this area further by speaking with two P2P service providers, Ms. Daria Rebenok, CEO and Co-Founder at Grabr, Mr. Ari Kestin CEO at Nimber, and logistics solutions expert Mr. Edward Haapala, Managing Director at DSV Solutions, about how P2P services work, security management, as well as their views on the future of P2P shipping.
HOW P2P WORKS
As seen by the two service providers we talked to, P2P shipping has different approaches and ways people can get involved. Both services have a similar shared feature where travelers that have extra space (in their luggage) can post their travel plans and offer others the ability to transport goods they need moved or brought to them. The difference between the services is that while Nimber is focused on the customer sending a product they already own to another location, Grabr offers users the ability to select items they would like brought to them. Both companies fill a niche in offering similar, but distinct different advantages with their services.
Nimber’s focus is on a community for those who want to send something to another city via a traveler who’s going to that location, and they have enough empty space in their car or suitcase to bring goods along. Senders can either go to their website or download their app, register, and indicate what and where they want to send. While the bringers can get paid for their empty space during the trips, the senders also get an amazing value proposition, great experience and cheaper delivery cost.
On the other hand, Grabr has a focus on the ‘shopper,’ where they can create an order by describing the items or simply pasting a direct URL to the product. Grabr will then match their request with travelers heading to the shopper’s city, and these travelers will bid to deliver the products. The shopper chooses the offer that works best for their schedule and budget. After being matched, the shopper and traveler arrange delivery via in-app messenger and submit secure payment. Travelers hand deliver items to shoppers – signed, sealed, and delivered. Most importantly, travelers get paid only after the shoppers receive their orders.
We still have more areas to explore and I think P2P will also play a big role in e-commerce last mile deliveries for everyday goods.
SIMPLIFYING SMALL ITEM DELIVERIES
P2P shipping has given more choice to consumers, when in the past they were very limited on how the could send something from one city to another. While larger shipments may still need a freight forwarder service, smaller items are becoming a breeze to send and receive with P2P services. Mr. Haapala, an expert in freight forwarding and solutions industry, sees a steady growing trend in P2P shipping and said, “Today, customers have more delivery options than ever before. This up swell in the use of P2P shipping is unique in its way it reaches users, and the way they provide services compared to traditional freight forwarding. P2P shipping normally offers cheaper prices for sending and receiving smaller sized items, as well as offering shoppers the ability to buy special items which are normally not available or rarely available in their country.”
WHAT’S NEW FOR CUSTOMERS
Ms. Rebenok said “One major benefit of using Grabr as opposed to traditional shipping services is the price.” As mentioned above, items that one might consider ‘everyday’ or ‘basic’ may be a rare find for someone who lives elsewhere. Shoppers would traditionally have to pay a high shipping fee, which is sometimes more expensive than the item itself. However, P2P services like Grabr allow shoppers the ability to pay a fair price for the product plus a monetary reward, which is usually between 15-20% of the product price, for the traveler who delivers it.
She continued, “Grabr not only enables people to shop for anything around the world, but also allows travelers to profit from the empty space in their suitcases. It’s a win-win all around. Moreover, we are very happy that we can build a globally connected community of shoppers and travelers, who are both open-minded. Many times, we’ve even seen the local shopper act as a tour guide to their traveler as well.”
Grabr not only enables people to shop for anything around the world, but also allows travelers to profit from the empty space in their suitcases. It’s a win-win all around.
Nimber, as the world’s first P2P service provider, has very positive feedback from users with an extremely high Net Promoter Score (NPS). They report that over 1% of the Norwegian population using their service and over 60% of their delivery requests come from existing, recurring users.
“The uptick in the number of users we’ve seen for Nimber has been predominantly based on word of mouth. Bringers love it as they can get paid during their trips and senders get both convenience and a great experience using the application. We believe that matching platforms for delivery will play a massive part in inter-city intra-city and express deliveries in the near future. I believe we are filling a much-needed gap in the current existing logistics structure. We still have more areas to explore and I think P2P will also play a big role in e-commerce last mile deliveries for everyday goods.”
Mr. Haapala agreed with much of what the two providers said and added, “I think P2P would be able to grow much more, since there is a void now in the area for those who want to deliver a small number of parcels. If they call an express delivery service provider to deliver a parcel, they might need to pay upwards of 50 USD for the service. Conversely, utilizing P2P service platforms for the same items, they’ll probably only have to pay around 10 USD to ship their parcel. How big this market share will be in the future, nobody knows for certain since this is a relatively new trend in logistics industry, but they have quite a market they have yet to explore with last mile deliveries.”
I think P2P would be able to grow much more, since there is a void now in the area for those who want to deliver a small number of parcels.
Ms. Rebenok agreed that P2P could certainly make quite an impact on the logistics industry in a similar way that Uber did for the taxi industry. However, this is not to say that P2P doesn’t have some big challenges to overcome, as it’s quite a new service to the market built upon trust. “Right now, I see trust, scaling and changing the mindset of people as our three biggest challenges. While people have been delivering goods and gifts to friends for years, there’s still some hesitance for doing so with a stranger. Through constant community building, trust and safety briefings and other initiatives, we are working to address these concerns and make everyone feel comfortable. In terms of payment, the same level of safety applies. After entering your credit card information, it is transferred directly to our payment processor, Stripe. They keep it secure and private. No one at Grabr has access to your payment details. Stripe uses the highest encryption to keep users’ bank details private and secure.”
Nimber also emphasizes the importance of building trust, customer confidence, and security as their priorities. That’s why Nimber provides customers with insurance and customer support, so that everyone will be comfortable using their service. “We insure every transaction so our user community is never left in the dark. From the first day that we began our service up until today, we have never had anything stolen; we’ve only had a few cases where the item was damaged during transit. Insurance and support aside, our reciprocal rating system elevates quality and reduces trust issues.”
A growing user base utilizing P2P platforms are allowing these P2P companies to continually expand their footprint. Nimber just expanded to the UK few months ago, and has been continuously receiving very positive feedback with a growing user base. Grabr already has offices in San Francisco, New York, and Moscow is also looking for more opportunities to expand their footprint as well to South East Asia and South America. As the trend of using P2P delivery services keeps growing, we might possibly see P2P delivery services play a much bigger role in delivering ‘everyday’ products for both consumers and businesses alike very soon.