Online shopping has influenced consumer buying habits. Consumers today expect fast, cheap, or even free delivery. Companies need to be able to increase efficiency and reduce costs to finance their shipping logistics in order to remain competitive.
This boils down to the last-mile delivery process of a company. This means that companies must find ways to increase efficiency in order to survive in this market.
This article will take a deep dive into the logistics for last mile delivery. We’ll identify the most significant challenges to last mile deliveries in the future and discuss how technology can help solve them.
What is Last Mile Delivery?
Last mile delivery is the last step in the delivery process. It is when a parcel is transported from a transportation hub and then to its final destination, which is usually a private residence or retail shop.
This is the most important step in the delivery process and one that businesses want to be as efficient and quick as possible. This is in order to meet the ever-increasing consumer demand for fast shipping, particularly in the eCommerce, food, and retail sectors. This is also the longest leg of the journey goods must take to reach their destination.
Also read: Top 10 Inventory Management Software
5 Key Steps to the Last Mile Delivery Process
These five steps can be broken down to help you understand the last mile delivery process.
Step 1
Orders can be digitally entered into a centralized system. This is where both the sender as well as the recipient of the request monitor orders and requests. They may use a tracking number to track the delivery status.
Step 2
Orders arrive in the transportation hub and are waiting for delivery to their recipient. This is the final mile of delivery. Businesses need to make sure the order reaches the customer as fast as possible.
Step 3
Delivery personnel are assigned orders based on routes and recipients. It is crucial to strategically sort and identify parcels for delivery in order to have an efficient, cost-effective delivery last mile logistics solution.
Step 4
Orders must be scanned before they are loaded onto delivery vehicles. This allows the sender to update the order status and the recipient to track the shipment. This reduces the chance of packages getting lost on the journey.
Step 5
Orders are successfully delivered to the recipients. Proof of delivery can be obtained. The parcel has reached its final destination at this point. To confirm and verify that delivery is complete, the delivery personnel updates the tracking information.
Also read: Distributed Order Management: What Is It, Characteristics & Benefits
What is the “Last Mile problem”?
We know that a fast last-mile delivery process is crucial to keep your customers satisfied. It’s paradoxical that while customers desire fast and free shipping, it can also be the most costly and time-consuming aspect of shipping. Companies can’t afford to please customers, considering how easy it is to find another place to shop.
This means that companies will have to pay the cost. That is the problem with last-mile delivery. 53% can make up a shipments total cost. Companies usually consume 25% of this cost, but this number is rising as supply chain inefficiencies become more costly.
5 Ways Technology can Solve Your Most and biggest Last-Mile Delivery Problems
Delivering a pleasant customer experience is possible by perfecting your last-mile delivery. How can you perfect your last mile delivery?
1. To reduce delivery times, use a route plan
Every driver who delivers packages knows the route they should follow. These routes should be simple and easy with drop-offs for parcels along the way.
However, in reality, the route may be many miles long and only have a handful of drop-offs, especially in rural areas. This means that a small number of deliveries can take a lot of time and fuel.
Similar results can be seen in densely populated areas where congestion from traffic can take up as much time and gas even though drop-offs may be closer.
Optimizes delivery routes by automatically factoring time location and vehicle capacity to determine the most efficient route. All traffic updates that may affect these routes are sent via SMS to drivers in real-time, optimizing route times and providing end users with accurate information.
2. Auto dispatching allows you to reduce service time and labor expenses.
In addition to the previous point, the software can plan your routes to save time This would require you to manually do it, but because the routes are updated in real-time, this can reduce the number of drivers required to complete deliveries.
Managers can establish rules for auto-assignment based on the driver’s location and distance. This will limit the number of tasks that each driver is assigned.
The dispatch feature allows for a new level of automation that saves time and allows for efficient resource allocation. Managers can also spend their time optimizing other aspects of the delivery process. This automation level simplifies last-mile logistics and reduces inefficiencies that can lead to higher delivery costs.
3. Get drivers to provide proof of delivery
A study of the industry found that 56% of consumers wanted more transparency in delivery. What are the most important elements your customers want from their last-mile services?
Proof Of DeliveryIs documentation that proves an item was delivered. It can include a signature of the recipient, a photograph of the package left at the door, and a date/time stamp.
Delivery platforms make it easy to prove delivery. The entire process can be completed by drivers via a mobile application that supports photo collection, signatures, and barcodes.
4. Reporting can be used to improve accountability
Reporting can help you find bottlenecks before they become bigger problems and identify opportunities for improvement.
Reporting tools allow you to monitor key metrics such as success rates, on-time rates, service times, and feedback scores. You can also track distance traveled, mileage, and other important metrics. This data can be filtered by drivers, teams, days, weeks, hours, and more.
To create custom, detailed reports, you can export the data at any moment. These KPIs can be used to track and monitor your company’s last-mile delivery supply chain, and you can see how much time is being spent.
5. Enhance the customer experience
To make meaningful improvements in customer communications, you must go beyond providing static tracking numbers to customers. Customer surveys showed that customers expect more from standard delivery services to be satisfied.
Also read: Supplier Relationship Management: What It is, Benefits & Process
7 Trends that Will Shape and Change Last Mile Delivery
These are seven trends companies are currently testing and executing to improve the delivery process last mile and meet consumer demand.
1. Rapid order fulfillment
A growing number of consumers expect same-day or on-demand delivery. This means that logistics and fulfillment are more important than ever. Today’s businesses need to be able to quickly turn around orders, sometimes faster than any technology can keep up with.
“What would normally take less than an hour all of a sudden has to be out within minutes which presents challenges in terms of planning,” Michael Armanious is the vice president of sales & marketing at Datexcorp (3PL) and a vice president of marketing.
2. Traceability improved
Old-school last-mile delivery carriers have enhanced their package traceability by adding features such as proof of delivery or tracking information.
This is a crucial part of tracking packages and figuring out where they are if they do get lost. The way we track packages has changed with the advent of new smartphone apps, which allows users to see exactly where their package is on the map and how far they are from their home.
Additionally, proof of delivery data such as whether or not a parcel was signed for or where and when it was left if there is no one home reduces disputes between customers and carriers and improves the overall last-mile delivery experience.
3. In-house delivery services
More businesses are using in-home delivery services, including Amazon. A company can have its own delivery vehicle fleet and salaried drivers to deliver shipments from its warehouses to its customers. This allows companies to reduce costs and improve customer service. and expand their delivery window, some even opting to deliver late in the evenings and weekends.
4. Micro warehousing
Let’s take Amazon again as an example: Amazon employs 58 transportation hubs within the US that are dedicated to their Prime Now service. This is for customers who want their orders delivered the same day.
This trend has led to more companies purchasing or allocating warehouse space for these fast deliveries. While many retailers have managed to reduce their delivery times to just two days, Amazon still leads the pack, with parcels delivered in as little as two hours. There are still many competitors to beat.
5. Carrier upsells
E-commerce stores often use your data to suggest similar products to you if you have previously purchased or viewed something from them. This is done in an effort to upsell you. This tactic is being used by last-mile delivery drivers, who may be upselling products at your door.
If a customer has been ordering oral hygiene products each month for three months, the delivery driver might bring toothpaste to their home and ask them if they are interested in buying it. It’s possible to upsell if they have ordered many garden supplies. some grass seeds or fertilizer may be good upsell opportunities.
6. Smart technology
Every day, the number of products that can be ordered online is increasing. Online ordering is becoming more popular for fresh and frozen food, as well as livestock such as plants and pets. These products must be shipped in certain conditions to preserve their integrity and well-being. Many fulfillment centers have implemented measures to regulate temperature, humidity, and air quality in their warehouses.
This means that more factors must be considered when planning routes, such as the weather. To account for temperature variations, additional packing materials may be necessary.
7. Drones and robots
Although robots and drones may not be trending right now, we are certain they will soon. Accenture’s global management consultant for the postal and parcel industries, Andre Pharand, stated in a Supply chain Dive article that “if parcels can be delivered autonomously or drones, it will change the game significantly.” Labor is the most expensive part of delivery, accounting for 60%. Delivery costs, labor availability, and shifts are the main limitations of delivery at present. Robotic delivery could be performed 24 hours per day.
Last Thoughts
There you have it. This article has covered last mile delivery, its challenges, and costs, as well as tips and tricks to optimize last mile delivery. We also discussed trends that you should be aware of in the future.
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