All last mile delivery companies' goal is to get the right goods to the right place at the right time (in the right condition). This is, of course, harder than ever to do efficiently. Why? Because customer expectations have changed, and they’re no longer willing to wait a week to get their order or block off a six hour window for the delivery service.
Paying attention to last mile delivery bodes well for companies. After all, the delivery experience has already replaced product and price as the primary brand differentiator. Consumers who once have chosen brands that can provide quality products at great prices are now veering towards companies that can offer a great delivery experience. Thus, building brand loyalty requires solving last mile problems.
Consumers consider speed, accuracy, and the timeliness of product deliveries as crucial elements in the last mile delivery stage. Meeting all these demands, however, can jack up last mile delivery costs. Satisfying consumer demand for reliable and fast shipping while maintaining reasonable operating costs is a tough balancing act for most businesses.
What Are the Challenges of Last Mile Delivery?
The end-stage of this logistics process is challenging to manage. The number of possible permutations for a route with hundreds of orders can quickly rise to a point where finding the optimal one by hand is impossible. This results in higher fuel and labor costs than delivery companies can afford, while making accurate time window estimations increasingly difficult.
The last mile stage accounts for a large chunk of companies' operating expenses, given the many inefficiencies in the process. First of all, getting orders to consignees at all requires a lot of fuel consumption. For example, some packages are located just a couple of blocks in the same cities, but drivers may have to spend many hours dropping packages despite the short distance because of traffic congestion. On the other hand, some orders are to be delivered in rural areas where the drop off points are miles away from each other.
Beyond that, there’s the challenge of optimizing resource usage and capacity utilization: if you can’t create a plan that uses the right trucks and the right personnel for the right orders, you’ll be stuck with costly unused truck capacity and services that are more expensive on your end than they need to be.
The last mile delivery is inherently inefficient, given the frequent stops and circuitous routes. Especially when there’s a variety of different goods to be transported, maximizing your truck and driver capacity is virtually impossible. Technological advances, however, are helping industry players address these inefficiencies.
Lack of Transparency
The digital age is changing customers’ expectations. Consumers once didn't mind picking up the phone to inquire about their orders' status or using the tracking codes provided to them by companies to monitor their packages. But those days are gone now. Technology has made consumers expect that companies will provide them with real-time information on their orders, and they see phone calls as unwanted escalations.
What Customers Look for in Last Mile Delivery Companies
Consumers have more choices these days given the exponential growth of e-commerce. But that's not to say that all businesses offering last mile deliveries can meet customers’ demand. After all, it's no walk in the park to overcome last mile problems effectively. But some companies have found a way to address the inefficiencies so they can offer a great delivery experience while minimizing costs. These businesses know what consumers want to experience in this final leg of this logistics process.
Here's what consumers are looking for in businesses offering last mile deliveries:
Real-time visibility on the orders is one of the essential features of last mile deliveries. One study of consumers revealed that around 93 percent of customers said they expect visibility on the whole delivery process, starting from the in-transit status and ending at the final delivery.
The same study showed that businesses are likely to lose 47 percent of their client base if they can't provide real-time tracking of orders. Companies cannot simply ignore the need of customers to know where their packages are at any given time. Customers appreciate companies that provide real-time updates and alerts, especially if the delivery will be delayed.
Plus, updates in real-time will minimize failed or missed deliveries as consumers have been informed of delivery changes ahead of time. Likewise, updates also help customers fix their schedule to accept the delivery which in turn can reduce the time drivers spend at each drop-off point.
Variety of Delivery Options
Most consumers want to receive their goods as fast as possible—but with a delivery schedule that’s convenient for them. Amazon has spoiled customers by providing them with same-day shipping options, which is why some businesses are only focusing on same-day delivery options or have limited delivery options.
Of course, not everyone wants same-day delivery—especially not for larger or bulkier items. But still, companies must keep in mind that offering overly limited delivery options won't satisfy consumers. Whether they’re self scheduling their deliveries from within set parameters, or simply indicating which delivery windows will work for them, consumers want to feel like their time is being respected.
Plus, the coronavirus has changed the way consumers receive their packages. Given the warnings against face-to-face interactions, businesses should also offer contactless delivery to ensure both clients' and employees' safety.
Accurate Expected Time of Arrivals (ETA) and Reasonable Time Frames
Like we said above, companies can't expect consumers to wait around until the package arrives. They want a reasonable delivery window, which companies must be consistent with. Providing a positive consumer experience entails offering a short delivery window and delivering on the promised time. Businesses must provide an accurate ETA; failure to do could mean a loss of customers.
Consumers also assume some risks when they decide to leave their purchased items in the delivery personnel's hands. They trust that goods they already paid for will be handled carefully and delivered promptly.
Companies that guarantee that the packages will be delivered safely have already won half the battle. From there, it’s a matter of ensuring that when the goods arrive, the service is up to snuff. This is hard to pull off when the driver is already running an hour behind schedule because the initial ETAs were unrealistic.
Last mile deliveries can be a significant cause of headaches for many employees, managers, executives and business owners. But efficient last mile delivery operations often result in more happy customers, repeat business, brand loyalty, and better margins, making all of a company’s efforts to perfect the last mile operations worth it.