Dive Brief:
- Last-mile delivery provider Gently is building out its Los Angeles operations further after completing its first delivery in April, with plans to launch in other U.S. markets down the road, co-founder Elian Pres-Gurwits said in an interview.
- Gently uses artificial intelligence and data to place goods closer to the customer and reduce delivery times, Pres-Gurwits said. Its predictive machine learning leverages data from retail partners, consumer purchase behavior and third parties to predict demand spikes and supply shortages, an April news release added.
- The company stores products it is tasked with delivering in "nano-fulfillment centers" in local communities. "It's a bit of a modular and agile approach, and we want to keep it modular and agile because consumer behavior and demand changes so quickly," Pres-Gurwits said.
Dive Insight:
Gently remains focused on growing and improving upon its innovative delivery model for the remainder of 2023, Pres-Gurwits said.
The company launched with three delivery drivers and will expand its team to 10 drivers in the near future, according to the release. Its nano-fulfillment centers are owned and operated by its drivers.
"This enables last-mile delivery drivers to leverage appreciating assets, such as their property, instead of depreciating assets, and gives them an opportunity to generate income from the supply chain, not just from last-mile delivery," the release said.
Gently has one nano-fulfillment center in West Los Angeles, along with a fixed distribution center, and it plans to introduce three more by May's end, per the release.
While nano-fulfillment centers allow Gently's delivery operations to be nimble, it's also a cost-effective approach. Pres-Gurwits noted that the high prices associated with building logistics infrastructure make it difficult for new entrants to make a splash in the space.
Those costs include increasingly expensive warehouse capacity. The greater Los Angeles region saw industrial asking lease rates reach a record high of $1.69 per square foot per month in Q1, according to CBRE. It's the eleventh consecutive quarter that rates have increased.
"We think the static approach with investing $150 million to $500 million into a warehouse is something that is not really keeping up with the dynamic world we live in," Pres-Gurwits said.
Gently aims to eventually expand into "Tier 1" U.S. markets that its customers want service in, Pres-Gurwits said, adding that the bulk of its shippers are mid-sized, direct-to-consumer brands.
In May, the company announced a delivery partnership with bamboo-made paper products company Cloud Paper. Through the arrangement, Gently will make deliveries of Cloud Paper products in the Los Angeles area.
"At Cloud Paper we look for ways to make our supply chain more efficient and more sustainable wherever possible," said Tori Kiss, the company's vice president of operations, in a statement. "Gently’s innovative approach to last-mile delivery is a win-win for Cloud Paper and our customers, and we are excited to be an early partner."
