Locker Alliance: Singapore’s innovation to its last mile delivery

Singapore is to integrate its last mile delivery with digital technology by implementing locker system across the island.

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Singapore is no beginner when it comes to logistics capabilities. Empirically, it stays consistently in a high position in the World Bank’s Logistics Performance Index – 7thout of 160 countries in 2018 and its ranking as second busiest port globally in 2018 – achieved because they can maintain highly efficient logistics systems to handle the massive amount of time-sensitive trans-shipment cargo.

Not surprising that Singapore government works hard to make sure Singapore always maintains its position as a global logistics hub. In 2016, the government launched the Logistics Industry Transformation Map and laid out various initiatives to develop and evolve the sector. The plan is hoped to be able to encourage logistics companies to advance and start adopting new technologies.

Related to the rise of all things digital, the Singapore government encourages its people to come up with solutions that would leverage new technologies to improve and transform logistics capabilities. One of the solutions is the Federated Lockers and Collection Points initiative, which aims to solve the common last mile delivery problem of end-buyer not being home when the delivery man calls.

Launched at the end of 2018, the Locker Alliance initiated a one-year program to test out the locker concept by establishing 70 locker sites covering two residential districts and eight urban metro stations. The ‘alliance’ is key and comes from the drive to bring industry players, including e-commerce companies, locker operators, and logistics service providers, onto a single interoperable platform, developed by Singaporean SaaS (software as a service) provider Parcel Perform.

A Solution for Last Mile (Credit: Singapore MCI)

The Federated Locker Interoperability Platform allows different parcel locker systems to work together, enabling the implementation of the necessary infrastructure and means that online retailers and logistics service providers can deliver to any locker in the network, while locker operators can look forward to high utilization of their assets. For example, in the Locker Alliance initiative, lockers in one of the two districts are operated by national postal service SingPost and in the other by local retail logistics company Blu Logistics. So far, a total of 15 companies have signed on to the Locker Alliance.

To order, send, retrieve, return, and track parcels on a shared platform necessitate the adoption of common communication and messaging protocol by the various Locker Alliance partners. Accordingly, the government led the digital transformation cooperating with Infocomm Media Development Authority (IMDA) and Singapore Manufacturing Federation to develop Technical Reference 61 standard on data interchange for last mile delivery that provides a framework to facilitate the required interoperability between different parcel locker networks and caters to a wide range of delivery process scenarios.

The IMDA states that once the technology is implemented island-wide, logistics service providers can potentially see a 50 percent reduction in distance traveled by drivers and a five-fold improvement in parcel delivery efficiency. Other benefits include reduced traffic congestion and carbon emissions from fewer multiple location small parcel deliveries. The Federated Lockers initiative will also serve to support the expected strong growth in e-commerce revenues, which in Singapore are expected to double over 2018–2022 time-frame.

Beyond Singapore, the initiative to create a region-wide locker alliance received a boost with the IMDA’s inking of a Memorandum of Intent (MOI) with three locker operators in South East Asia: Box 24 (Thailand), Pakpobox (Hong Kong), and Popbox (Indonesia. A network of inter-operable locker system across countries promises increased regional reach opportunities for online retailers as well as for logistics service providers looking to deliver on the last mile.

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