As more and more consumers in North America continue to turn to the eCommerce industry and online shopping for their purchasing needs, online retailers are looking to provide speedy home delivery. This is no longer seen as a sort of high-end service but an absolute necessity.
As such, delivery companies have gone on to develop new technology solutions and various supply chain strategies to expedite transport deliveries, increase package volume, improve customers’ online shopping experience, and lower costs, all at the same time. That said, last-mile logistics remains one of the biggest challenges of the entire delivery process.
What Is the Last Mile, and Why Is It so Important?
Part of a package’s journey from the warehouse to the customer’s front door, last mile or final mile stands for the final step of the delivery process. Basically, everything that happens from the fulfillment center to the final destination is part of the last-mile delivery process.
What makes it important, however, is that this final stretch is what your customers see of your brand. In other words, last-mile represents the face of your business, as far as the customer is concerned. Whatever happens during this stage will have a tremendous impact on people’s overall shopping and delivery experience. Last-mile deliveries provide your brand’s reputation with an enhancement in their eyes.
It will take only a few missed or delayed transport deliveries before word gets spread around in the form of negative reviews. And it doesn’t take much for today’s digital consumer to switch online retailers at the slightest sign of inconvenience. As such, many retailers are looking to implement last-mile services and improve the delivery experience
What Is the Last Mile Logistics Problem?
While the importance of last-mile delivery in ensuring ongoing success is undeniable in North America, there is a combination of factors that make it quite problematic for online retail companies and their transportation and logistics partners. If you ever tracked a package in real-time and found that it was tagged as being “out for delivery,” that’s the last mile. If you’ve noticed the package being stuck at this stage for a seemingly unjustified period of time, you begin to understand the problems facing last-mile logistics.
Total costs and general inefficiencies in the transportation industry typically make up the so-called last-mile problem and every fleet manager is aware of it. They’ve also been further compounded in recent years, with the rise of the eCommerce industry. This has not only increased the total number of packages delivered to front doors, but it has also raised customer expectations. Many today expect fast, same-day delivery and a free one as well.
What are the Last-Mile Delivery Challenges?
Every third party fleet manager that deals with supply-chain logistics know that there are multiple moving parts that add to the last mile problem. Among these, we can include the following last-mile logistics challenges:
- The State of the Infrastructure – Found predominantly, but not exclusively, in developing areas, poor infrastructure can often lead to long journeys, unexpected delays, and inefficient routes. All of these will work together to increase overall transportation and logistics costs and time lags that could, otherwise, be avoided.
- The Location of the Distribution Center and Delivery Frequency – Among the other last-mile delivery challenges to keep in mind is the location and delivery density. In rural areas, for instance, the distance between the distribution center and the final destination can be quite long. Likewise, delivery points along any particular route can be many miles apart. These immediately add to rising costs and inefficiency. In urban areas, where everything is closer together, the benefits can be immediately negated by frequent traffic congestions. Route optimization should be a priority. The fleet manages should consider new technology solutions as they can help in this regard.
- Different Types of Goods and Deliveries – There’s also the last mile common challenge for the fleet manager in terms of inefficiency and costs. If you’re transporting a sizeable B2B delivery, the extra costs and time may be worth it. But when it comes to B2C deliveries, the cost of additional fuel and time rarely pays off. Also, there is a matter of the type of goods. Food delivery will be different from fragile delivery, for example, meaning that some items may require some additional planning and equipment. The delivery management system should be able to cope with these differences.
- Customer Differences and Nuances – Another common challenge that can rarely be anticipated are customer differences. Anything from incorrect addresses, remote locations, returning orders, cancellations, etc., will only add to the problem.
The Cost of Last-Mile Delivery
As we said, the last-mile is the most expensive part of the entire supply chain. By most estimates, it makes up nearly 30% of the entire cost of shipping. When it comes to food delivery, this cost can be even higher. Granted, this cost is often passed to the customer, but this is not always the case.
Final mile delivery costs are not a new issue. But due to the free home delivery phenomenon, more and more customers expect it as a given, putting an even bigger strain on retailers and logistics companies alike. This can become an even larger issue during periods of peak demand, such as during the holidays when higher volumes of purchases can disrupt normal patterns and add to already strained budgets.
Though there is no easy way of solving the cost problem, careful planning can go a long way in leveling the playing field. Working with a reputable logistics partner will also lift much of the burden.
Transparency in Last Mile Delivery
Over the past several years, third-party logistics providers and others in the transportation industry began issuing tracking codes, providing customers with a higher degree of visibility in terms of their deliveries. Today, however, such tracking codes don’t improve customer satisfaction as much as they did in the past. People nowadays want to see the entirety of last-mile logistics in real-time. This will provide them with a much clearer picture as to when their package will arrive.
This can reduce customer support inquiries, missed deliveries, and other similar issues inside and outside fulfillment centers. In turn, this will help improve the customer experience, turning your clients into repeat customers or even brand advocates.
A “White Glove” Mindset in Last-Mile Delivery to Improve Operational Efficiency
A “white glove” mindset in the context of last-mile delivery often translates to increased operational efficiency. By putting the customer’s needs front and center of the operation, you will ensure fewer hiccups or unexpected circumstances along the way. Similarly, white glove delivery services in the form of product staging, assembly, and disassembly, as well as the removal of packing materials, will go a long way in boosting customer satisfaction. They will also lower the risk of missed or lost delivery.
At CRST STI, we are prepared to provide you with the best guidance for your last-mile logistics strategy, how to avoid these challenges of last-mile delivery, and improve your customer experience. We know all the ins and outs of the supply chain and are always one step ahead of any hurdles that may come your way. Together with us, your same-day delivery management system will solve every final mile delivery challenge and other delivery challenges so that your customer experience will skyrocket like never before.