Last mile delivery is the most challenging step in any logistics process. It’s also one of the most expensive and time-consuming steps, but it’s essential to success for many e-commerce companies. In this blog post, we’ll take a deep dive into last mile deliveries:
- What they are.
- How they work.
- Why they’re so crucial for your business.
- How to find the best service providers for your needs..
Let’s get started!
The last mile of delivery is often the most expensive and inefficient part of an e-commerce business. With all the competition in this industry, it can be hard to find a reliable partner that will take your product from point A to B without hassle. That’s why we put together this ultimate guide with everything you need to know about last mile delivery, so you don’t have any problems along the way! We cover how to choose a provider, what factors should go into selecting one, and some best practices when working with them.
With the rise of e-commerce, last mile delivery has become an increasingly important aspect of logistics. This post will provide a brief overview and discuss some of the most common challenges companies face in this space.
The last mile refers to the final part of a shipment’s journey from its origin to its destination. Providing reliable, on-time service can be challenging with such a short timeframe and often requires coordination between multiple parties. To help make sense of it all, we’ve created this ultimate guide to last mile delivery!
Last mile delivery is the final stage in a logistics process, where goods are delivered from a distribution center to the customer’s door. It can be challenging to manage last mile deliveries because of their size and time constraints. However, there are many benefits, including shorter lead times, less storage space required at your warehouse, and reduced inventory carrying costs. This article will discuss last mile delivery and common challenges that arise during this phase of the transportation process, such as managing multiple orders from different customers with limited resources. We will also look at how you can overcome these challenges by choosing the right company for your last mile delivery needs!
What is the Last Mile?
The last mile delivery is a term that describes the transportation of goods from a distribution center to an end customer. The challenges faced by companies who do last mile deliveries are often related to logistics, but there are other factors as well.
The last mile delivery can be accomplished by either using a courier service or a logistics company. Many factors go into choosing how to ship the items, including distance from the distribution center, cost of shipping, time frame for receiving order/shipment, and more. The last mile delivery is crucial for e-commerce companies because it represents the most expensive leg of shipment; for this reason, many online retailers use special services that provide last mile logistics.
It can be challenging to establish a fleet of vehicles for last mile delivery because the expense is often too high for many companies. Maintaining and operating this fleet also requires diverting resources from core objectives, making it an increasingly unfavorable option.
However, you should keep in mind that, as more products are being purchased through online shopping rather than in-person, delivery is becoming a prominent aspect of a company’s customer experience.
These services typically use smaller vehicles (motorcycle or car) with drivers who deliver packages door-to-door. For this reason, they may not offer deliveries in remote areas or large residential buildings such as apartment complexes or condos where there isn’t
Crowdsourced delivery marketplaces are a relatively new innovation over the last few years that have shaken up the logistics market. These services don’t own their trucks and can quickly scale to meet needs based on demand, making them very innovative. They also have variable costs for the delivery, allowing customers to find a balance between cost and convenience. These marketplaces offer the flexibility of web/cloud and on-the-go apps, so you can conveniently track your package in real-time. They also provide access to industry-standard technology such as tracking information, which means you receive a high-quality delivery experience that can flex up and down to meet demand.
Outsourcing to a 3PL Organization
Outsourcing last mile delivery to a third-party logistics company can be an excellent way for small to midsize business owners to grow their last mile delivery capacity. These companies provide the opportunity of managing transportation operations outside of your organization, which can help you focus on other parts of running your company while still ensuring that deliveries are handled appropriately.
Today, most brands use third-party providers to meet their last mile demands. The reliance on these professionals has increased as companies digitize the logistics side of the business with an added emphasis on the customer experience.
How Does Last Mile Delivery Work?
Last mile delivery is an integral part of the supply chain and involves five main steps. First, orders are processed through a centralized company, giving both the recipient and sender reassurance that their order is on its way. After that, The order arrives at the transportation hub and is transported to its final destination, the “last mile.” The process aims to make sure the arrival time from when it arrives in the hub to delivery is the shortest possible.
Next comes the delivery assignment. This is a process that assigns items specific routes and the most effective delivery technique for each. It can be automated, manual, or a mix of both. The second to last step is scanning – orders are scanned at transportation hubs, keeping the system robust and all stakeholders informed. The very last step is the package arrival and confirmation of delivery.
There can be additional steps to take depending on the organization, such as obtaining customer feedback or proof of delivery. With this in mind, we can safely conclude that there is no one process for last mile delivery, nor is there a single uniform procedure – every organization can and should tailor this process to their own needs and abilities.
Why Should We Care About Last Mile Delivery?
Consumers’ reliance on e-commerce for their shopping habits has driven the demand for delivery options, which are more reliant and better at fulfillment.
The COVID 19 pandemic hit the world community harder than most expected, especially online retailers. Within a year, it went from growing by 10% every six years to 60% annually. Selling over the internet became increasingly challenging given the sped-up growth rates, and that caused an issue with fulfillment in e-commerce until consolidation took effect.
Encouraged by increasing consumer demands for faster deliveries and more convenient options, the industry has been pushed to set new expectations in fulfillment speed, cost, and convenience. Greater competition means retailers need to step up their logistics operations and delivery services. However, last mile delivery is expensive, and shipping companies cannot keep up with demand. Solving this problem is crucial for retailers and other online sellers if they want to scale their business.
E-commerce competition is becoming increasingly competitive each day. To maintain customer faith, brands and last mile logistics providers must invest in an exceptional delivery experience to keep customers satisfied.
Take Amazon. The e-commerce behemoth constantly raises the bar for consumer expectations. In addition to the one-day delivery change, Amazon also came out with 2-hour delivery on certain products for Prime subscribers. In highly competitive markets, same-day delivery has become a “must” in order to keep customer loyalty high. We already know that customers love brands that offer same-day delivery. In fact, 57% of customers say that same-day delivery will make them more loyal to a specific brand.
However, there is a flip side to the coin: costs. Last mile delivery is so expensive that Amazon decided it would be more cost-effective to build its own supply chain.
Common Challenges of Last Mile Delivery
Last mile delivery can prove to be complicated for companies who have never dealt with it before. It can quickly go out of hand and escalate into a catastrophe with missed delivery schedules, higher fuel costs, and incorrect deliveries. Let’s see what the other challenges involved with the last mile delivery are.
One of the significant issues related to last mile delivery is limited visibility. The fleet owners in most countries hail from an unorganized sector, which causes a lack of visibility.
Ensuring Seamless Deliveries
With the demand for next-day and same-day delivery going up, it is now necessary to think about how you will meet those demands. With customers demanding flexibility and customization along with real-time tracking, your company must have a solution in place to give this service. More often than not, it becomes challenging to reassure delivery for various customers due to the variety in their demands.
Cooperation Between the Customer and the delivery Person
This might seem like a trivial issue; however, it’s a serious challenge that all companies face. Often, it happens that the customer is not present at the delivery location or they are out of reach. These types of situations do not only waste time and money, but they also put the package at risk of damage or theft. Ensuring that this does not happen is paramount to the parcel delivery, and the delivery time needs to be very precise and clearly conveyed to the customer.
Another significant challenge is ensuring your drivers/delivery executives’ productivity and continuously optimizing routes. If your drivers are not on time to the last mile (or you have a driver shortage), this will result in delays and possibly lost packages. Inefficient routes can lead to wasted gas, which translates into higher costs for all parties involved.
Avoiding the common pitfalls of last mile delivery will ensure higher levels of customer satisfaction and reduce costs for your business. But the opposite is true, too.
Assembly, Skilled Unpacking, and Installation of Items
Packages that require unpacking and assembly often need to be looked at by a skilled person when delivered. This raises a challenge for shippers to ensure that the final product is precisely the true reflection of what was sold and promised.
Moreover, some products require skilled technicians for their installation. E-commerce is increasing the share of retail sales, meaning that merchants need to hire more technicians to fulfill the void.
The Benefits of Optimizing Last Mile Delivery Services
In today’s market, customers expect complete transparency from every step of a transaction. The last mile of your delivery can make or break their experience with you and impact possible future transactions. The challenges we mentioned above can turn into huge issues that can potentially lead to bad customer experiences, negatively affecting your business in the long run.
Thankfully, there are ways to optimize the last mile delivery services which will help you avoid those issues.
Streamlined and Automated Processes
Last-mile delivery is a process that can be automated. This would take care of the time-consuming and repetitive tasks in the delivery process. It’s efficient because it saves a lot of time, resources, and money for your business – methods like tracking such as waybills or handwritten receipts lead to human errors, which are avoidable with last-mile automation. That system also empowers your business with predictive insights, automatically allocating resources such as transport, drivers, and even the inventory.
To overcome the challenges of, for instance, peak traffic hours, bad weather, or route disruptions, the delivery routes need to be planned to be dynamic. That way, deliveries can be re-routed and drivers assigned to the most optimal route. Keeping an eye on weather and traffic conditions is vital so that last mile delivery routes are adjusted accordingly.
Providing Flexible Delivery Solutions
Some shoppers want to have flexibility when it comes to delivery, which is why some prefer to have packages delivered while they’re home or at work. For example, if you ordered something and scheduled it to be delivered to your house when you’re not there, what if you could change the hours or location of your delivery so that it arrives while you are in town?
Providing these types of solutions can be of aid with resolving the challenges of, for instance, customers missing their delivery.
Proactive Order Management
Despite the best practices that may be in place, delays do happen. For example, the driver may be stuck in traffic for hours. Sometimes there’s nothing to do but contact the customer early on with an anticipated delay, so they have a better understanding of what to expect. Whether or not it’s one hour late or a day later than expected, think about proactively letting them know about their delivery status.
How to Plan a Successful Last Mile Delivery
Considering how highly complicated it is to take care of last mile delivery, successful planning would rely on choosing the right last mile delivery partner.
The customer’s expectations for delivery are high, and the companies have to meet and exceed those expectations. Without help from the last mile delivery provider, most companies will struggle to make same-day or faster deliveries. And the risks of disappointing customers are high. 84% of customers won’t return after a single bad experience, so they need to deliver on time each and every time. When you partner with the right last mile logistics provider, your deliveries are timely, reliable, and consistent.
However, there are several things to keep in mind when choosing the 3PL company to aid with your last mile delivery services:
- Can this company’s solution stay ahead of your company’s growth?
- Is the company you’re considering committing to meeting your expectations for delivery speed and accuracy?
- Are the drivers professionals who represent your company accurately?
- What are the company’s steps in ensuring customer satisfaction?
- How will the company meet your customer’s expectations for real-time tracking and notifications, analytics, and other technical capabilities?
A company that can fulfill all those requirements is RedBird Logistics Services – with over 30 years of experience in the business and a constant growth rate, they provide solutions for any and all logistics needs that you may have.