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RMIT International University Vietnam OMGT2279 (Transportation and Freight Logistics) A 1 Subject Code (Name): OMGT2279 (Transportation and Freight Logistics) Location and Campus (example: RMIT Vietnam, HCMC) RMIT Vietnam, HN Number of class group: (example: SGS-G01)
HN_G
Student Name: Student Number: (example: S359271) Your Lecturer: (example: Dr. Nguyen) Pr. Michael C Word Count: 459 words
Start your paper here Challenge: How could cost-to-serve improve the last-mile delivery in the Transportation & Freight Logistics industry in Vietnam in 2023?
- Background The landscape of last-mile delivery in the Transportation & Freight Logistics industry in Vietnam is undergoing a transformative shift in 2023, marked by the country's expanding economy, manufacturing, and e-commerce sectors (Bhatla 2020). The term “last-mile delivery” refers to the final step in transportation, which includes all activities related to all logistical operations associated with delivering packages to residential customers in urban locations (Boysen et al. 2021). This phase has become an essential point for companies to focus on, especially during the Industrial Revolution 4.0, where customers prefer to shop online rather than going directly to the retailer store (Phuong 2020). In this context, the cost-to-serve method has emerged as an important framework that captures the true cost of incurred through the delivery process, making it easier to capture external supply chain costs (Ross et al. 2010)
- The effect of this challenge on the overall logistics in Vietnam The first challenge involves consumer payment behavior, with a preference for offline payments due to concerns about online fraud. Cash-On-Delivery (COD) and Open Box services, allowing customers to inspect goods upon delivery, are favored, leading to a higher cancellation risk (Phuong 2020). COD-related issues, such as customers refusing shipments for various reasons, result in losses for shippers and delivery companies due to return costs and depreciation of unsellable items (Phuong 2020). The second threat is related to poor quality addresses and rural areas, which can result in failed delivery attempts. Moreover, the inaccuracy in the time and place of delivery of customers causes extra costs of redelivery, worsen the customer experience (Phuong 2020). The next major challenge is the shortage of technology adoption in e-logistics. Automation systems are limited, hindering the efficiency of logistics providers (Phuong 2020). The use of advanced technologies like robots or drones is impractical due to high costs, inadequate infrastructure, and concerns about shipment safety. Additionally, not all customers, especially
