To most e-commerce shoppers, the delivery process is invisible to them. Most of what they see is limited to the delivery person that shows up at their door with the package. For an alien from outer space, it might even assume humans are simply playing a giant game of “pass the parcel”. But, as described by a delivery route planner that The Edge Singapore spoke to, the last mile industry is “very messy.” According to him, the industry suffers from a very high turnover rate as the hours are long and the pay is low relative to the average Singaporean worker.
While he acknowledges that he cannot speak for all companies, the planner, who also goes out for deliveries, reveals that a typical day for a driver starts as early as 7.30am.
The driver will go to the warehouse to pick up his assigned deliveries for the day before planning his route and heading out about an hour later.
Most delivery drivers end their shifts at about 10pm but those who end earlier can head home at about 8pm to 9pm.
What this means is that these drivers are on the road for about 12 to 14 hours a day and while different companies have different schedules and different compensation schemes, delivery drivers are on average paid $1,400 to $1,600 a month, or $2,200 at most.
Depending on the nature of the deliveries, a driver may be required to do anywhere from 40 to 100 deliveries — known as “drops’’ — a day. Some drops must be done within certain time slots and some must be done within a certain time, like when delivering groceries containing perishable items.
At some companies or subcontractors, delivery drivers have to work about 12 hours per day, seven days a week, with no Central Provident Fund (CPF) contributions, no leave days, medical leave, or benefits. “If you need to take urgent leave, it will be unpaid leave,” he says.
He explains that this is due to some contracts being structured as a “lump sum” contract, where the arrangement is that the driver will do this amount of work, in exchange for a fixed amount of pay each month.
Drivers usually get to use the delivery van, with petrol, parking and servicing paid for by the company.
From what he knows, “a number” of companies have such practices, but he points out: “While to us it may seem low, these drivers don’t mind. To them, it’s ‘I have my own transportation, everything is covered and my salary is $1,400. I can just use this to spend on my daily expenditure.’”
How did the industry get to this stage? The planner points out that one reason could be the large number of competing subcontractors. Some subcontractors to bigger companies even hire their own subcontractors to fulfil the order at a lower rate, thereby depressing wages further.
“So if I pay $8 per delivery, the subcontractor will pay someone $6 per delivery to do the job, and this person could get another subcontractor to do the delivery for $5 per delivery.”
Asked if it would be better to consolidate these companies under the main logistics company, he points out that this will entail a huge amount of work.
“There are a lot of factors to take in when you have your own drivers. You need to buy vans, you need to cover petrol or diesel, and you need to pay for parking, road tax, insurance, and maintenance. These are all costs. If you have a subcontractor, you just put up money instead.”
While using subcontractors may make things easier for the company, the staffer says that the high turnover in the industry makes it such that if a driver decides not to turn up one day, deliveries are delayed, especially when using smaller subcontractors.
“Drivers know that there are a lot of logistics companies. If this one isn’t for me, I can go to another company. They can even go back to their original company.”
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The most pertinent point the planner brought up was that contrary to the claims made by certain CEOs and managers in the sector, he says there is no shortage of drivers. Instead, there are jobs that drivers shun.
“They are opportunities for drivers everywhere,” he says. However, it is the nature of the e-commerce logistics ecosystem that makes work “very difficult” for them. Drivers have to come early in the morning, sort out their delivery orders and spend the whole day delivering these parcels. When they return at night, they have to sort out deliveries for the next day.
Some jobs, like delivering groceries, mean that a driver cannot simply load up all the deliveries for the day, and parcel them out as he goes, as food can be perishable and cannot be left outside an apartment. Instead, what a delivery driver does is pick up the items from the warehouse, deliver them to the customer and return to the warehouse to pick up items for the next delivery. This is a job not all drivers would do, he says.
To avoid dealing with these problems, companies would rather engage a subcontractor and pay them to manage these issues, which goes back to the point of the waterfall effect of subcontractors subcontracting out projects to smaller subcontractors.
Asked what can be done to make the job more attractive, the staffer says this depends on each individual driver. But at present, there is no clear sign things will improve. “It’s very messy, this logistics industry. Especially the last mile.”