Tech fixes will help overwrought property managers today, but what will happen as online sales grow even more?
THE “LAST MILE” of the distribution chain can be challenging (see “An Efficient ‘Last Mile,’"), but it may be nothing compared to moving a package those last few feet — from carrier to consumer — as online sales surge.
Package delivery already is a problem at many apartment complexes and some office buildings. According to a 2014 National Multifamily Housing Council (NMHC) and Kingsley Associates package delivery survey, at 77 percent of apartment buildings surveyed, package carriers will first try to deliver a parcel directly to the resident’s door, rather than going straight to the management office. Rick Haughey, NMHC vice president for industry technology initiatives, said that number drops to just 20 percent in high-rises (buildings of nine stories or more). If the resident isn’t home, package carriers will take a parcel to the management office 70 percent of the time, which leads to a huge volume of packages for the manager to handle. That same survey also revealed that the average apartment complex receives as many as 100 packages a week, with the volume doubling around the holidays.
“According to a 2015 Wall Street Journal article, Camden Property Trust estimated that handling a single package results in 10 minutes of lost productivity,” notes Kobi Bensimon, vice president of RealPage Inc., a Carrollton, Texas, firm that sells package locker systems as well as property management software and other IT services. “Multiply that by the 1 million packages Camden handled in 2014, and you begin to see just how big an issue package management is, especially as online shopping continues to grow — 2015 saw a 25 percent growth in package shipments over 2014.”
This is a year-round problem, not just a holiday season issue, according to Lisa M. Newton, vice president, multifamily operations, for Hines in Houston. She says that the problem used to be the risk associated with accepting a package, but today it is about volume and how that volume affects a management team’s time and space constraints. Newer developments are able to plan for packages, she adds, while older communities may have limited options to expand.
Here are some solutions that the industry is using.
Don’t Take Packages
The simplest solution is to not accept packages for residents if they are not at home or in the office. Last year, Camden Property Trust stopped accepting deliveries for residents at all of its 169 U.S. apartment properties.
Transwestern has a similar policy at Emerald Plaza, a 30-story mixed-use building in San Diego. “Our formal policy is that we do not accept packages. But we want to help our [office]tenants, so we have made arrangements with UPS, Fedex and Norco Delivery Services to have boxes on site for package pickup and delivery,” says Mark D’Ambrosi, general manager, management services, for Emerald Plaza’s offices. “In addition, there are three postal box-type stores within three blocks of our building — a UPS, a Go Postal and a Postal Annex store. We have encouraged our tenants who receive after-hours packages to make arrangements with one of these stores. The stores accept packages on a 24-hour basis.”
Emerald Plaza also has an on-site mail room, which is operated by the U.S. Postal Service. Tenants receive mailboxes at no additional cost. According to Transwestern, if a package is too large for a tenant’s mailbox, USPS places the package in an oversized (18 by 18 by 24-inch) mailbox, and a key for that mailbox is placed in the tenant’s assigned mailbox. If the package is too large for the oversized box, the postal carrier attempts to deliver it to the tenant’s office suite. If nobody is there to accept the delivery, a delivery tag is left in the tenant’s mailbox.
Use Tracking Software
Package-tracking software, which is often part of a property management software suite already in use, is another solution that solves some but not all of the problems associated with package delivery. It automates the process by logging in a package and notifying the resident/tenant, but it still requires that the manager store the package in a safe place and later retrieve it.
Hines uses a smartphone app at its 21eleven luxury apartment complex in Houston that allows staff to scan packages in as they arrive, according to Newton. Residents receive an email and a text message notification as soon as the package is scanned. When they go to the office to pick up the package, they simply sign it out on their iPad. “It’s really a great tool for our staff,” says Newton. “The app also allows us to send text message alerts, which are helpful when sending inclement weather and construction updates, as well as resident event reminders.”
Install Package Lockers
On-site electronic package lockers are another effective solution. In this scenario, if the resident is not at home, the carrier drops off the package at a locker and notifies the tenant. The notification message contains a code that the tenant can use to access the locker on a 24/7 basis.
“There are two benefits to package lockers,” says Georgianna W. Oliver, CEO of Medfield, Massachusetts-based Package Concierge, which produces electronic lockers. “It cuts down on the amount of time that the property manager needs to take with packages and, because package lockers are available on a 24-hour basis, unlike the property manager’s office, it is convenient for the resident.” The company’s corrosion-resistant steel locker system is seven feet high by two feet deep; its length and the number and size of lockers varies, depending on the community type and size, geographic location and age of residents.
While this may be a good solution for some properties, the costs involved in installing a locker system are significant. Oliver says a 200-unit apartment complex should expect to get about 40 packages a day, and it should install 60 to 70 lockers to accommodate those deliveries, at a cost of about $20,000. Residents are unlikely to be willing to pay for a locker system, so the cost will likely fall on the building owner.
NMHC’s Haughey suggests treating package delivery like an amenity and promoting it as such. In fact, according to an NMHC survey, apartment residents rank a package delivery room as second only to a fitness center in amenity popularity.
Planning for Packages
Whatever solution property owners and managers decide on today may prove to be only a temporary fix. While older apartment and office complexes with little extra space will most likely continue to struggle with the package delivery issue, developers of complexes now in the planning stages should anticipate the coming crush of package deliveries, and design and build properties that can accommodate them.
What will happen down the road, as e-commerce grabs an ever larger share of the retail dollar, reaching 20 or even 30 percent of all retail sales? “It’s an overwhelming thought for property managers,” says RealPage’s Bensimon. “When online shopping reaches 30 percent of purchases, communities will operate more like logistics centers than apartment buildings. While the current solutions ease the burden of package delivery, the industry will have to develop new innovative solutions to handle that type of load.”