Case Notes/Answers
Improving Last-Mile Productivity at Paack By Mihalis
Markakis, Victor Martinez de Albeniz
Discussion Questions:
Prior to discussing this case in class, students can be asked to prepare the following questions:
• Why is productivity such a crucial metric for Paack’s business model? How well is the
company doing in this regard?
• What means does Paack have to improve productivity in package delivery?
• What is the mix of “supplier” logistics companies with which Paack should work to
balance customer service, cost, and risk?
• What rewards or penalties can Paack employ to incentivize driver productivity?
, HBP# I00072
OITT-4-E
September 2024
Improving last-mile productivity at Paack – Teaching
note
Mihalis G. Markakis
Victor Martínez de Albéniz
Case synopsis
Last-mile delivery is by far the most operationally complex and costly part of logistics.
Nevertheless, it has become a critical function of e-commerce in the last 20 years, particularly
since the COVID-19 pandemic. This case follows Paack, a technology-based fourth-party logistics
(4PL) start-up based in Barcelona and operating in several European countries, in its dual pursuit
of growth and profitability. Against the backdrop of high interest rates and an ensuing liquidity
crunch, as well as widespread turbulence in the tech industry in late 2022, profitability in the
not-so-distant future has become imperative for Paack. Given Paack’s business model,
profitability goes hand in hand with boosting productivity in last-mile delivery because the
company pays its logistics providers per day/week/month but, itself, is paid per delivered
package. How the desired productivity improvement target can be achieved is unclear. This
might be organically, through growth and economies of scale and aggregation; through
investments in technology and analytics; through incentives and people management of delivery
personnel; or through good old operations management?
Learning objectives
This case is intended to facilitate an in-depth discussion of the last-mile logistics sector, which
has become a central piece of e-commerce in the last 20 years, especially post-COVID, including
the competitive landscape and the different business models that one can encounter, the
economic viability and operational challenges, and the main avenues towards growth and
Last edited: 19/9/24
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Mar 2026. Copying or posting is an infringement of copyright.
or 617.783.7860.
Improving Last-Mile Productivity at Paack By Mihalis
Markakis, Victor Martinez de Albeniz
Discussion Questions:
Prior to discussing this case in class, students can be asked to prepare the following questions:
• Why is productivity such a crucial metric for Paack’s business model? How well is the
company doing in this regard?
• What means does Paack have to improve productivity in package delivery?
• What is the mix of “supplier” logistics companies with which Paack should work to
balance customer service, cost, and risk?
• What rewards or penalties can Paack employ to incentivize driver productivity?
, HBP# I00072
OITT-4-E
September 2024
Improving last-mile productivity at Paack – Teaching
note
Mihalis G. Markakis
Victor Martínez de Albéniz
Case synopsis
Last-mile delivery is by far the most operationally complex and costly part of logistics.
Nevertheless, it has become a critical function of e-commerce in the last 20 years, particularly
since the COVID-19 pandemic. This case follows Paack, a technology-based fourth-party logistics
(4PL) start-up based in Barcelona and operating in several European countries, in its dual pursuit
of growth and profitability. Against the backdrop of high interest rates and an ensuing liquidity
crunch, as well as widespread turbulence in the tech industry in late 2022, profitability in the
not-so-distant future has become imperative for Paack. Given Paack’s business model,
profitability goes hand in hand with boosting productivity in last-mile delivery because the
company pays its logistics providers per day/week/month but, itself, is paid per delivered
package. How the desired productivity improvement target can be achieved is unclear. This
might be organically, through growth and economies of scale and aggregation; through
investments in technology and analytics; through incentives and people management of delivery
personnel; or through good old operations management?
Learning objectives
This case is intended to facilitate an in-depth discussion of the last-mile logistics sector, which
has become a central piece of e-commerce in the last 20 years, especially post-COVID, including
the competitive landscape and the different business models that one can encounter, the
economic viability and operational challenges, and the main avenues towards growth and
Last edited: 19/9/24
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Mar 2026. Copying or posting is an infringement of copyright.
or 617.783.7860.
