Southeast Asia’s Last-Mile Delivery Challenge: How to Solve “Last-Mile” Efficiency Issues?

I. Analysis of Southeast Asia’s “Last-Mile” Pain Points
Southeast Asia’s low “last-mile” delivery efficiency primarily faces the following challenges:

1. Infrastructure Constraints
   Road congestion (e.g., Bangkok, Jakarta, Manila)

Difficulty covering remote areas (Indonesian archipelago, mountainous areas of the Philippines)

Chaotic address systems (non-standardized, relying on landmarks rather than house numbers)

2. High Delivery Costs
   Mainly motorcycle delivery (small single-trip loads, high costs)

Rising labor costs (courier salaries in Vietnam and Thailand increase by over 10% annually)

High return rates (e-commerce order return rates reach 15-30%)

3. Technical and Management Shortcomings
   Low logistics informationization (reliance on telephone communication, lack of intelligent scheduling)

Scattered delivery points (less than 20% coverage of self-collection lockers)

Reliance on cash payments (over 60% of COD payments, increasing delivery time)

II. Six Strategies to Address the “Last-Mile” Problem
Strategy 1: Optimizing the Delivery Network
✅ Establish a diversified delivery model

Urban centers: Electric vehicles/scooters + smart lockers (e.g., Singapore’s Ninja Van)

Suburban/rural areas: Partner with local stores (e.g., Warung, Indonesia)

Island areas: Pilot programs using drones/speedboats (GrabExpress is currently testing in the Philippines)

✅ Develop a network of self-collection points

Partner with convenience stores such as 7-Eleven and Circle K (80% coverage in Thailand)

Use community supermarkets/gas stations as parcel collection points

📌 Case study:

J&T established 15,000 self-collection points in Indonesia, reducing delivery costs by 25%

Strategy 2: Technology-driven efficiency improvements
✅ Intelligent route planning

Use AI algorithms to optimize delivery routes (e.g., Lalamove’s dynamic scheduling)

Real-time traffic data integration (avoiding congestion periods)

✅ Automated sorting and notifications

Automatic pickup code push via SMS/WhatsApp

Facial recognition pickup (already available at some lockers in Singapore)

📌 Data:

Route optimization systems can reduce delivery drivers’ travel distance by 20%

Strategy 3: Promote cashless payments
✅ Reduce reliance on cash on delivery (COD)

Offer online payment discounts (e.g., Lazada encourages e-wallet payments)

Prioritize delivery for prepaid packages

✅ Digital payment tools

Equip delivery drivers with portable POS terminals (a model inspired by GrabFood)

Partner with local e-wallets (e.g., DANA, OVO)

📌 Results:

Every 10% increase in e-payment penetration increases delivery efficiency by 8%

Strategy 4: Crowdsourcing and shared logistics
✅ Uber-style crowdsourcing delivery

Encourage part-time delivery by private cars and motorcycles (e.g., GoSend, Lalamove)

Dynamic pricing incentives during peak hours

✅ Community-based shared delivery

Combined delivery for orders from the same community (e.g., Shopee’s “Group Buy Delivery” model)

📌 Case study:

GrabExpress uses a crowdsourcing model in Vietnam, achieving 95% coverage

Strategy 5: Localized partnerships
✅ Alliances with local logistics companies

Chinese logistics providers + local express delivery (e.g., Jitu’s acquisition of Best Inc.’s Southeast Asian operations)

Transforming traditional postal networks (e.g., Thailand Post’s “Last Mile Plus” program)

✅ Leveraging social media for coordination

Facebook/WhatsApp group pickup notifications

Official Line accounts provide real-time tracking

Strategy 6: Policy and standardization promotion
✅ Promote address system standardization

Malaysia’s MyPostcode program (postal codes accurate down to the street level)

Google Maps + local landmark database

✅ Government-business collaboration

Indonesia’s “1000 Digital Post Offices” program (rural coverage)

Vietnam’s electric vehicle delivery subsidy policy

III. Country-specific solutions
Country Core Issues Best Practices
Indonesia: Fragmented islands and poor transportation: Gojek’s crowdsourcing network + community-based Warung collection points
Thailand: Severe traffic congestion in Bangkok: Motorcycle and subway delivery (Kerry Express)
Vietnam: Low rural coverage: Postal network + electric vehicle fleet (Viettel Post)
Philippines: Typhoon impacts logistics: Churches/schools serve as temporary distribution centers
Malaysia: Low e-payment penetration: 7-11 pickup points + Touch’n Go e-wallet
Singapore: High labor costs: Drones + automated delivery lockers
IV. Future Trends and Innovation

1. Unmanned delivery technology
   Drone pilot program (Singapore Post to expand testing in 2024)

Autonomous delivery vehicles (Bangkok CBD area trial, Thailand)

2. New energy logistics network
   Vietnam/Thailand: Promoting electric motorcycle delivery

Solar-powered refrigerated boxes (Sayurbox fresh food delivery in Indonesia)

3. Metaverse and Virtual Warehousing
   AR Navigation Assists Delivery Drivers with Route Finding

Digital Twins Optimize Warehouse-End-of-Line Flow

V. Implementation Recommendations
Short-Term (0-6 Months):

Contracting with Local Convenience Stores as Pickup Points

Launching an Intelligent Route Planning System

Mid-Term (6-12 Months):

Promoting Electronic Payments to Over 50% of the Total

Piloting a Crowdsourced Delivery Model

Long-Term (1-3 Years):

Investing in Automated Sorting Centers

Participating in Government Address Standardization Projects

VI. Success Case Studies
Case Study: Lazada’s “Last Mile” Transformation in Indonesia

Problem: Delivery Time in Jakarta Exceeds 72 Hours, Complaint Rate 30%

Solution:

Establishing 2,000 Community Collection Points

Introducing an AI Route Planning System

Training Delivery Drivers in Using Electronic Signature Tools

Results:

Average Delivery Time Reduced to 24 Hours

Costs Reduced by 18%

Summary: Breaking through the “Last Mile” in Southeast Asia requires a three-pronged approach: technology application, local collaboration, and policy adaptation. Prioritize building a self-pickup network, optimizing routes, and transforming payments, then gradually transition to long-term solutions like automation and new energy. The key is to flexibly adapt to the specifics of each country’s market; there’s no one-size-fits-all solution.