Yandex.Market: building own delivery to support 2.5 YoY growth with 95% arrival accuracy

  1. Challenge
    Achieve better last mile quality amid rapid growth in the number of orders
  2. Solution
    Create an in-house courier platform with delivery automation
  3. Results
    On-time delivery rates reached 95%, and the in-house delivery project was expanded to several more cities
About the partner
Yandex.Market is an online marketplace where consumers can choose from a huge selection of goods and buy anything from a bathrobe to a washing machine. The service delivers several thousand orders daily in Moscow alone. The wide range of product categories means that the size, weight, and compatibility of items must be taken into account for delivery. 
Building a reputation with quality delivery

Initially, Yandex.Market relied on partner transport companies and third-party services to deliver orders to their customers. When volumes began to grow rapidly, it became essential for the marketplace to take full control over all stages of the delivery process, including the last mile. 

The last mile is the delivery stage that the customer sees and the part that directly affects their satisfaction with the service. It incorporates several key parameters, including delivery timing and accuracy. Monitoring this stage gives the company confidence that the customer is satisfied with the delivery and will return to make new purchases. 

In 2019, Yandex.Market started building its own in-house courier platform to reduce transaction costs in managing individual couriers. The platform distributes orders to couriers, reminds them to call the customer and notify them of the scheduled delivery, and shows the precise delivery route. 

Couriers use the platform as an app on their phone, and customers can check the courier's real-time location in the Yandex.Market app. Given their plans to grow even further, the marketplace team knew it was smart to focus on automating processes right from the start – from planning delivery routes to reminding couriers to contact customers. To make this possible, Yandex.Market had to resolve three important challenges. 

Challenge 1. Fast route planning
With thousands of deliveries a day, manual planning is not practical. This is why Yandex.Market decided early on to invest in an automated route planning system. The company opted for RouteQ – a logistics platform that helps companies build optimal delivery routes. It can solve large-scale problems in 20 to 30 minutes, unlike other logistics platforms that can take several hours to process orders as massive as the ones Yandex.Market deals with. 

RouteQ can plot routes for a large number of points very quickly, making it easier to perform targeted planning, select an optimal strategy, and choose the best routing option. One available strategy is to evenly divide orders between couriers to distribute the load equally. An alternative approach is to maximize resources by building the densest possible routes for couriers. 
Yandex.Market usually seeks a balance between the use of resources and the cost of the solution. 

Each solution has metrics for comparison, like the total mileage of all routes, the distance covered by each courier, travel time and downtime, the start and end time of the route, and the required number of couriers. After comparing the available solutions, the Yandex.Market team selects one of the strategies and begins the final planning stage.

Challenge 2. Incorporating delivery parameters
Organizing deliveries to Yandex.Market customers involves many parameters that are important for both the business and the buyer. You have to think about time frames, product weights and dimensions, vehicle capacity, and compatibility of items.

This complex task is the ideal candidate for an automated solution. Each set of routes has parameters (like total mileage, time, number of delays, cost of vehicles used, and others) that ultimately determine how much the solution will cost. The algorithm searches for the solution with the lowest cost overall.

Solving this challenge involves handling a huge amount of information. For example, there are about 3 million road segments in Moscow alone. RouteQ’s automated algorithm plots routes using the average speed forecast for each segment at different times of day. This achieves new levels of optimization that you simply can’t pull off with manual planning.

Essentially, the task itself is a complex algorithm, and there is no single correct solution. The algorithm gets an approximation of the optimal result after trying hundreds of millions of combinations.
Challenge 3. Expanding to other regions
The original plan at Yandex.Market was to use their proprietary delivery system first in Moscow and then in other regions of Russia. With that in mind, the system was designed to rapidly scale delivery volumes when expanding in other regions. Yandex.Market made this expansion possible by combining technology with a special approach to courier onboarding. As a result, order volumes grew rapidly: 200 orders processed through the courier platform in a new city at the beginning of the week could easily turn to more than 2000 by the end of the same week.

One of the great things about Yandex.Market’s in-house platform is that it allows them to apply automated route planning to new regions without complicated modifications. At the same time, the company can quickly expand its pool of couriers and train new hires to meet their internal standards of delivery quality. 

In July, Yandex.Market launched an experiment with its in-house delivery service in Rostov-on-Don, where they now deliver up to 1000 orders a day. In Saint Petersburg, the courier platform is handling up to 4000 orders a day. The rollout continues, with the cities of Krasnodar and Nizhny Novgorod already on board. 
Implementing RouteQ algorithms: results and figures
accuracy of compliance with delivery intervals
20-30 min
time to schedule a large-volume task
+4 cities
available for your own delivery
Yandex.Market organized an in-house courier delivery service using RouteQ technologies, and here’s what they achieved:
  1. 95% accuracy in meeting clients' delivery time windows. This means that there are no more than five delays per 100 deliveries.
  2. Fast scalability. The delivery system was designed in a way that allows Yandex.Market to quickly scale delivery volumes. 
  3. Simplified launching of deliveries in other regions. The platform is designed so that automated route planning can be replicated in new cities without additional development. 
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Fri Jan 14 2022 16:58:05 GMT+0300 (Moscow Standard Time)