If you’ve ever sped thousands of miles on a long-haul flight only to get stuck in traffic heading home from the airport, you’ll understand why the last mile is a thorny problem for logistics companies. We think nothing of moving goods globally, but in today’s crowded cities it’s challenging to efficiently deliver packages to the exact home or business where and when they’re needed.
The last mile costs businesses $40 billion a year, or over 50 percent of total shipping costs, while also straining urban infrastructure. Last year, 1.5 million packages were delivered daily in New York City, with double-parked trucks racking up 471,000 parking violations. Deliveries also impact air quality: trucks account for five percent of road vehicles but 27 percent of emissions.
Last-mile demand is forecast to increase 78 percent by 2030, so this challenge is entrenched and growing. With the COVID-19 shutdown accelerating our transition to an all-delivery economy, and shipments surging as cities reopen and businesses restock, we urgently need a new approach.
Finding a path forward
Of course, delivery fleets don’t want to clog our streets: they’d prefer to glide frictionlessly from one drop-off to the next, saving time, fuel, and money while delighting customers with consistently on-time deliveries. But charting efficient routes through constantly changing urban environments is a complex and dynamic problem that drivers and dispatchers struggle to solve.
That’s where Wise Systems comes in. Led by CEO Chazz Sims, the Cambridge, MA, startup is bringing fresh eyes to an old industry. The remarkable team of founders, who met at MIT’s Media Lab, combine technical savvy with clarity of insight, allowing them not only to identify the problem, but to build a real solution. The end result: a product that uses machine learning to plan and perfect delivery routes in real time, giving fleets dynamic tools to ensure drivers always take the best possible route.
Unlike old-school route-planning software, which is static and unsuited to complex urban environments, Wise Systems’ solution is dynamic, responding in real time to unforeseen road conditions, driver inputs, or customer requests to constantly re-optimize routes. Wise Systems’ powerful machine learning engine also learns from the changes made by dispatchers and drivers to continually improve.
Making smarter choices
The results are compelling: Wise Systems’ customers report annual cost savings totaling thousands of dollars per route, while reducing miles driven (and thus emissions) by at least 15%. Smarter planning also lets managers make smarter choices, prioritizing speed of delivery, fuel economy, or route efficiency.
Wise Systems’ AI technology learns from drivers as they complete their routes. If a driver deviates from their assigned route — perhaps because a customer prefers trucks to approach from a certain direction — the Wise Systems algorithm intelligently absorbs that information and incorporates it into future planning. That ensures drivers are working with, not against, their routing system, reducing frustrations and burnout — an important consideration as driver turnover approaches 96 percent per year. And when drivers do leave, their knowledge is preserved in the Wise Systems algorithm, ensuring easy onboarding for new drivers and continuity for customers.
Wise Systems’ ability to adapt to changing circumstances, from minor inconveniences like road closures to major shocks like COVID-19, makes fleets more efficient and resilient, no matter what the future brings. Real-time route updates mean more punctual deliveries and happier customers: Anheuser-Busch, for instance, was able to reduce late arrivals by 80% after switching to Wise Systems. Customers also get more accurate ETAs — always an important factor in customer satisfaction, but an increasingly critical capability as businesses implement staggered delivery slots to promote social distancing.
Getting there from here
For America’s 150,000 delivery fleets, the Wise Systems platform couldn’t have come at a better time. Now, Sims and his team are poised to unlock a multibillion-dollar global market for next-generation fleet-management tools, while also solving one of the critical challenges facing major cities.
That’s exactly the kind of transformative innovation we created Valo Ventures to support. We fund companies with serious growth potential, but we also believe that the biggest opportunities lie in addressing the pent-up demand for scalable solutions to major societal problems. Urban sustainability and mobility are core values for us, and we’re eager to bring Wise Systems’ technologies to a wider audience.
It will take more than great software to solve the last-mile problem, but Wise Systems is leading the way by showing the feasibility and commercial potential of innovating the last mile. Cracking this nut won’t be easy. But with the right people, the right ideas, and the determination to drive real change, we believe that you can get there from here.