“DHL takes over the 85 parcel machines from Smartmile in the Netherlands.”
– Emerce.nl/ paketda.de & Duurzaam ondernemen
You might have seen this title cross your screen in our newest press release. This release tells the tale of our renewed partnership with DHL Parcel. Of course, there might be some (or lots) of questions on your mind, so let’s dive into the finer details of this spectacular tale and analyse why we’re taking on this new role.
To kick things off, let’s start with the base; Smartmile.
1. Who or what is Smartmile?
Since you are on our website, chances are you know Smartmile a little. We’re a start-up aiming to revolutionise the delivery industry by optimising the current infrastructure.
In case you didn’t know us yet, a small summary to help you out.
Smartmile is a software company that puts the focus on building sustainable and optimised infrastructures of parcel machines. We continue to place parcel machines at key locations, empowered with our smart software. This software allows every delivery service or partner in the area to connect at one clear place, forming a so called ‘ecosystem’. Building these ecosystems is the key to an optimised infrastructure. It decreases CO₂ by reducing the amount of unnecessary driven kilometres. It also saves time for consumer, retailer and courier. All while maintaining a user friendly experience for every party involved.
By connecting companies around the same set of parcel machines, we can design truly sustainable services as one, covering the last mile, together.
A realistic example from the future:
You ordered your new favourite snuggy online; the perfect lazy item for which you had no intention to make any effort of getting it yourself from a store or other place far far away. So you select a parcel machine near you. It gets delivered by an electric car to the parcel machine, and you get the notification on your phone.
Your snuggy is so close by, ready to be picked up. But you glance outside, to the rain and suddenly your snuggy doesn’t seem as close anymore. Are you going to take a car?
Then you see the option to deliver it home by bike courier with just one click in the app. Immediately behind the scenes, our software connects your request to our partner, the local bike couriers start-up. You select your preferred delivery time, the doorbell rings, your friendly neighbourhood biker hands over your new snuggy, and you’re ready to slouch on the couch with your favourite show.
And best of all, the whole process did not produce unnecessary CO2, and you could stay on your lazy a$$.
To bring this example to life, you need a parcel machine, a courier, and a bike courier and their systems have to be able to communicate. That’s only possible with Smartmile.
2. DHL and Smartmile
Let’s start from the beginning; Smartmile entered the Dutch market about three years ago, ready to revolutionise the industry. We kicked off our open and shared network in the Netherlands with Lidl, and DHL Parcel as our launching partners.
To understand what happened next, first some background information.
The Dutch market is very different from the Finnish market, the market where Smartmile’s journey began. In the Netherlands, two players hold the majority of market share; PostNL (65%) and DHL (35%) (Statista, 2020). Since this market is mainly dominated by PostNL and DHL, there isn’t an equal division of delivery volumes.
When a market is mostly divided among two major- and a few smaller logistics players, it is necessary to work together with at least one of the big ones.
During one of our meetings with DHL Parcel in Q2, they shared their ambition to expand their own parcel locker network. Since they have been a long-term partner and with us from day one, we had to come up with a solution that would benefit all of the involved parties.
At first, we saw only two obvious choices;
First of all, working together with all the small players in the Netherlands to continue our open and shared network without DHL Parcel integrated.
But operating an open network with all the small players would have taken us too much time, money and resources. Offering a solution that didn’t show a strong enough guarantee for a sustainable business model to continue with.
The second choice was to work together with DHL Parcel on a closed system.
With this option, we would get distracted from our mission to build open and shared networks.
Both of these choices would either be extremely time consuming and/or potentially spread our resources, all for a market that in its market shares does not reflect the split for an open and shared concept.
So after thinking long and hard about our choices, we put on our innovative head, and found an unexpected option.
Introducing the unexpected;
A temporary experiment with DHL Parcel for 12 months.
- Another 12 months of running our software with DHL in a different way, improving the product and taking the ultimate test.
- Feedback and insights on the integration of our software, user interface and direct interaction. All from one of the biggest logistical players in Europe.
- A temporary financial boost which would strengthen our market position, but even more importantly, providing us a head start for our German entry.
- Keeping all our rights to our own magical software for ourselves, by licensing it to DHL for a matter of 12 months.
- Freeing up time in our herd, which we can refocus on the German entry. Because DHL parcel will takeover the operational management of the 85 parcel machines in the Netherlands.
For DHL this meant that they would get:
- All our 85 parcel machines in the Netherlands, so they could add this to their current infrastructure. Preventing unnecessary machines getting built at same locations.
- A 12 month software license, to empower these 85 machines with our Smartmile software. Handing them all the flexibility and capabilities that we have designed for the ecosystems that we’ve built.
- Extra preparation time (12 months) to ready their own closed network software, to run on these different types of machines after the experiment.
- The partnership with Lidl. To maintain the 85 locations, DHL Parcel will continue our collaboration with Lidl, giving them access to al the connected machines.Second level consultancy and support from our operational unicorns in the Netherlands to keep everything smooth with our Smartmile parcel machines.
Pretty cool solution, right?
3. What will the future bring?
Since we’re an international company focused on building these ecosystems around the globe, one delivery at a time, we’ve expanded to several countries. We’ve got offices in Finland, Germany, The Netherlands and Kenya, filled with a team of passionate entrepreneurs with different backgrounds.
Continuing our mission means focussing on launching the Smartmile ecosystems in more and more markets around the globe. Connecting partners, start-ups, consumers and other great companies together in one ecosystem.
One of our next steps is to enter the German market. Here we’re already talking about possible cities to start up, different companies to work with, and durable partnerships. The German market is very suitable for our open and shared network, because the German market consist of many different players without an overwhelming monopoly. This means that the market is quite equally divided over several players, whom we’d like to connect together to optimise their current system.
For future content, you can follow our social media channels to stay updated with our developments. Topics that will be coming back in the upcoming time are our future plans, our amazing herd and some in-depth information about our magical software. Stay tuned!