The Straits Times says

New ways to lock in efficiency gains

Plans for a nationwide locker system in high-density areas, for the convenient collection of parcels, represent a practical way of dealing with age-old delivery problems. Recipients are often not on premises to receive parcels, making "last-mile" delivery - the final link in the logistics chain from the sender to the customer's doorstep - a wasteful and time-consuming affair. While the situation is common in many parts of the world, it is inexcusable that such an inefficient system should exist in labour-scarce Singapore. The problem will be exacerbated as e-commerce grows. Uncoordinated deliveries can also clog up roads and accesses of buildings.

There simply has to be a better way of moving goods cheaply and efficiently across the island. In Mumbai, the dabbawalas' organisation has been able to come up with a low-cost system of delivering lunchboxes that has been studied even at the Harvard Business School because of its Six Sigma service performance. Perhaps, a national system of lockers here might become the first in the logistics world to crack the puzzle of connecting people and things as effortlessly as the Internet links users to each other and to data.

With an eye on productivity, a number of local logistics firms have welcomed the move. Although manpower would still be needed for deliveries, it would be used in a far more productive way. Should this reduce costs significantly for firms, the benefits should be passed on to consumers to help ensure the system is well-utilised.

The locker initiative should form part of a broader attempt to improve productivity in the domestic logistics sector. For example, companies maintain more resources than they need. This is seen especially in their excessive use of trucks, drivers and delivery personnel. It was reported last year that about 4,000 trucks made more than 20,000 delivery trips every day and took up about a quarter of road space. Different trucks delivered small amounts of cargo to the same location, causing the use of more manpower than necessary and bottlenecks along roads outside malls.

The adoption of best practices from around the world should form a key part of the sector's attempts to raise productivity. It is in the interest of all operators to collaborate in coming up with a well-functioning locker system that is essentially a private-sector effort. SingPost and logistics start-up Ninja Van have put in place their own locker systems, attesting to the market potential for this service. However, it would be impractical and expensive for companies to have their own lockers in each neighbourhood. A national system would make more sense by providing a common infrastructure that all can tap to remain competitive. Indeed, a low-cost system might even be utilised by small merchants and ordinary people to deliver items for a variety of purposes.

A version of this article appeared in the print edition of The Straits Times on May 07, 2016, with the headline 'New ways to lock in efficiency gains'. Print Edition | Subscribe