The shopping habits of consumers have changed, particularly when it comes to internet purchases. Consumers of today demand quick, inexpensive, or even free delivery. Therefore, in order to fund their shipping logistics, businesses must find a means to increase efficiency and reduce costs in order to remain competitive.
This largely comes down to how a business handles last-mile deliveries. This means that in order for a business to succeed in this market, it must discover ways to increase its level of efficiency. Given that delivery locations and schedules are unknown until a customer puts an order, the last mile is similarly unpredictable. When shippers can select from a variety of fleet types and fulfillment options, the process becomes even more difficult and complicated.
In an increasingly e-commerce-driven world, it is crucial for shippers and carriers to get the delivery experience right. In order to increase sales and please customers, factors other than pricing and product must be taken into account. Consumers now prioritize delivery as a critical criterion when determining where to buy their online goods. The best competitive advantage is a fantastic delivery experience.
In this post, we’ll go in-depth on the logistics of last-mile delivery, pinpoint the key difficulties you’ll have in the future, and talk about how technology may help you overcome them and offer your business a competitive edge.
How does last-mile delivery work?
The last mile delivery is the link in the e-commerce supply chain that really links customers and brands by delivering the customer’s order. Products are delivered from a warehouse or distribution center to a customer’s residence, place of business, or parcel locker. The last mile of the product’s trip is the most challenging and costly for the shipper.
To ensure that every delivery reaches its destination consistently, on time, precisely, efficiently, and sustainably, outstanding last-mile delivery aims to achieve these goals.
What is the last-mile problem?
Operations in the last mile have never been more difficult. Increased variability in the how, where, and when of deliveries gives shippers and carriers alike more options, but it also makes the final mile more challenging.
The last mile issue is a result of numerous difficulties. Lack of efficiency, which raises the cost of the final mile, is a problem for shippers and carriers. Providing all stakeholders with real-time visibility into the whereabouts of delivery presents another difficulty.
Amazon raised the bar with its consistently improving capacity to deliver in lower time frames while also informing the customer of the specifics of the transit delivery. Brands with and without their own specialized fleets work to uphold the “Amazon effect” and fulfil the delivery dates and times that they have promised to customers.
Customers anticipate speedier delivery times while also wanting visibility into their goods. The last mile dilemma is how to satisfy all stakeholders while delivering in progressively shorter time limits in the most economical and effective way possible.
In other words, all businesses are impacted by the last-mile delivery issue. Every business in the modern world strives to provide goods swiftly, effectively, and with exceptional customer service while operating in an environment that is becoming more complex and competitive.
Why is last-mile delivery such a difficult task?
You don’t send a lot of goods to one area, unlike with large-scale shipping and distribution. Instead, they transport a number of smaller packages, each with a different destination. The last mile problem is essentially this: more stops lead to more complicated routes, more downtime, and longer travel distances. To send a few things, you must therefore maintain a larger fleet of delivery trucks and drivers. An additional step that could make the procedure more difficult is the requirement for indoor delivery for specific products.
Which industries are affected by the issue of last-mile delivery?
By definition, last-mile delivery applies to companies that send goods directly to customers.
These companies comprise, but are not limited to:
- couriers/ truck driver jobs company
- independent logistics firms
- retailers using a direct-to-consumer business strategy
- companies who supply meals
- grocery stores that deliver
- shopping centers that deliver
- restaurants with delivery services
- pharmacies with delivery services
You might have a website with an e-commerce store even if your business works with wholesalers or retailers in the supply chain of your goods.
This implies that you are still responsible for shipping, including last-mile delivery, for items that arrive in this manner.
Why does last-mile delivery cost so much?
Last-mile fulfillment is complicated, and it costs a lot for a variety of reasons. Redefining delivery orchestration throughout the delivery journey is the key to streamlining the last mile. A good delivery experience is mostly dependent on optimizing dynamic routing, scheduling, and tracking while assuring delivery accuracy.
A chunk of the price of the last mile is due to failed deliveries. According to a survey from 2021, eight percent of domestic first-time deliveries are unsuccessful, costing businesses $17.20 on average for each purchase or $197,730 annually.
For merchants, returns are expensive because of the initial delivery fee and the difficulties of the return. Additionally, some orders that are returned must have their prices reduced in order to make another sale. According to a McKinsey analysis, as omnichannel retail has grown, the rate of returns has risen and now ranges from 20% to 30%, with customers finding it difficult to bear the cost of returns. Retailers must once more include the cost of shipping the replacement item in their margins when dealing with returns.
8 Ways Technology Can Address the Biggest Logistics Issues in the Last Mile
Your delivery process can be optimized with the use of technology and analytics, whether it’s through real-time driver tracking, driver communication, dispatch planning, or efficient fleet management. What are some of a final mile delivery solution’s major components?
Delivery time reduction through dynamic routing
It might be extremely difficult to determine the best path to take to reach specified locations in the allotted amount of time. The ideal last-mile solution guarantees quick deliveries, higher profitability, and top-notch customer service. It enables logistics managers to follow their fleet’s drivers as they travel on planned routes in real time.
Routes are also planned and optimized through dynamic routing. The most effective route to get to a customer’s location is automatically generated based on route productivity, vehicle capacity, and fuel consumption. By maximizing travel times, it may also predict delivery timings.
Auto Dispatching speeds up service and lowers labor costs
Platforms for last-mile distribution provide effective resource planning while limiting last-mile expenditures. The software can discover drivers and arrange your routes, as well as assign various jobs to each driver. As it saves time and may require fewer drivers, it is essential in lowering inefficiencies. The dispatch automation tool makes the procedure easier overall and aids in lowering the price of last-mile delivery.
Control of delivery operations from start to finish
The last mile can be made or broken by the visibility of delivery operations at ground level. Businesses can instantly acquire 100% visibility of logistics operations after placing an order by utilizing contemporary last-mile logistics technologies. When necessary, logistics managers can swiftly correct irregularities by monitoring ground-level activity in real-time.
Proof of Delivery (PoD) for improved efficiency and transparency
Greater transparency is added to the last mile services system as a result of proof of delivery. A POD, or proof of delivery, is a concise document that includes the recipient’s signature, date and time stamp, a picture of the package, and other information to verify that the item has been delivered. This straightforward step can make the entire delivery procedure consumer-friendly. Drivers can enter information into a mobile app that is typically integrated with the PoD while delivering a package. This app includes capabilities like photo collecting, signature capture, barcode scanning, and note-taking.
Benchmark KPIs that are precise
Businesses can more precisely benchmark KPIs and increase SLA adherence by utilizing a contemporary last-mile delivery management technology. In order to examine crucial delivery benchmarks including driver performance, delayed deliveries, customer ratings, ETA adherence, pending deliveries, 3PL performance, and more, the platform gives logistics stakeholders a single point of access.
Flexible & customized delivery services
Personalization is a key advantage of online shopping. Customers decide where and when they want their purchases to be delivered.
For businesses to provide excellent customer experiences, personalized last-mile delivery experiences are essential. Giving customers the freedom to choose when, where, and how they receive or return their items becomes even more crucial in the post-pandemic environment, where many people work remotely or in a hybrid capacity.
Deliveries through crowdsourcing
Businesses are finding it more challenging to scale their delivery operations efficiently and cost-effectively with their current resources as a result of the rising demand for residential deliveries. Businesses across industries may efficiently increase delivery operations thanks to a sophisticated logistics system that is supported by crowdsourcing technologies. By scanning the gig economy, it can easily onboard temporary or part-time employees. Based on costs, productivity, urgency, and proximity, it onboards personnel.
Put the customer experience first
Last mile delivery has evolved to focus more on providing great customer experiences as well as getting things to consumers. It is the development of a business’s brand image. It is imperative that businesses concentrate on making last-mile deliveries more customer-centric. Businesses won’t be able to provide a top-notch brand and customer experience or enjoy the long-term advantages of brand loyalty until then.