Solving the Last Mile Delivery Challenge: 3 Basic Steps
Mar 15th, 2020 5 Min Read
High expectations from customers regarding their delivery encounters have altered the way organizations are approaching fulfillment and last-mile deliveries. Research reports that up to 47% of customers desire a delivery window of two hours or less. The last-mile delivery business model also revealed that 80% of eCommerce buyers expect real-time tools to track their deliveries. Consumer demands are forcing businesses across the board—from building supply to medical, grocers, restaurants, retail, etc.—to reconsider how they support and address their last-mile logistics process. Though the challenge for businesses keeps rising in tandem with customer expectations, it's absolutely critical to establish their brand for the long term by seeding loyalty through top tier service and a sustainable approach to serving this last phase of the consumer journey.
What is the last mile? (logistically speaking)
The term "last mile" concerns the operational abilities (attributed to software, physical locations, delivery service units, and human labor, etc.) that companies have under their direction, to fulfill consumer home service and, or delivery. The desired outcome of this intricate operational plan is to empower companies to give their customers the finest available last-mile experience for their delivery, which commences when they sign off on the services or goods received.
The current eCommerce scene, where last mile logistics Amazon type latecomers are increasingly gaining excellent delivery results, optimizing their last mile delivery logistics solutions is essential for any business that must deliver or service goods at the customer's home.
Facing the Obstacles of Last Mile Logistics
Here are the key challenges facing last-mile based businesses and last-mile delivery startups:
How does last mile delivery work?
Put plainly, last mile delivery is the transfer of items and goods from a transportation warehouse or central distribution hub to its last delivery destination. In most instances, that end destination is the customer's home. The purpose of last mile transport is to deliver items to customers as soon as possible while reducing the associated cost factors.
How to acquire visibility and data on the supply chain: The critical element of a delivery system demands relevant, real-time data on more than precise locations of goods and associated stock, but also the amount of open orders currently waiting on every eCommerce portal; the proprietary protocol; internal and outside fleets that are ready to deliver goods; and more. Having key data points on delivery flow, in addition to customer behavioral information, companies can and will learn faster about improving delivery procedures. These optimizations can then facilitate businesses to offer more accuracy, versatility, and simplicity consumers have come to expect.
What is the last mile delivery problem?
Historically, the last portion of the supply chain is often less efficient, representing up to 41% of the total cost to ship, track, and deliver goods. This, in effect, has been coined the "last mile problem" as it is known within the logistics industry. This issue can also pertain to the more complex enterprise of performing deliveries in dense, urban areas.
What you should know about running service fleets—from crowdsourced origins and beyond. Organizations relying on outside fleets (beyond internal resources) must deal with a special assortment of issues that cannot be neglected. Where third-party labor is concerned, this is uniquely relevant because they will be your last touchpoint with customers for the last mile. Companies contracting numerous outside fleets and help need to figure out ways to keep full agency of the complete delivery cycle and ensure their brand's standards and service quality is maintained. This level of control will allow them to execute and meet the high standards of their customer's expectancies.
Why is last mile delivery so expensive?
It's been well documented that the final mile of delivery is the most expensive portion of the fulfillment process. Estimates vary with most findings, equating the percentage between 41 and 53% of overall delivery costs on the last mile. There are a few key reasons why the last mile is expensive, one of them being there is a larger human element than other phases of the process, with drivers going door-to-door (and more apartments nowadays) to deliver. In urban areas, the distance between stops can be reduced due to the density factor, but in rural areas, drivers will have to drive many more miles because of their stops are spread out.
Constructing and managing different delivery methods while keeping costs down. As businesses produce better ways to fulfill deliveries and serve customers, they also must also stay vigilant to reduce costs and maintain a positive ROI. Performing these while also scaling and increasing offerings—as far as delivery models such as on-demand and traditionally planned) generates other challenges in all areas of the delivery meshwork.
Here are three important, basic steps any company can use to conduct their last mile logistics operations like the London Symphony while addressing the core challenges we've just covered:
3 basic steps to optimized logistics for the last mile
1. Leverage data to inform decision making and optimize methods.
Being “last mile sightless” isn't an option for organizations trying to stand out with more efficient offerings for the last mile. To correctly progress, and exceed consumer expectations during the fulfillment phase of the last mile, companies need to obtain dependable, real-time data into every characteristic of their delivery services—and they must use these new perspectives to drive decisions about everything optimization related, such as the time required to make last-mile deliveries, and how it can vary based on region, traffic and how far spread out each of the customer stops is.
2. Automate, then automate some more...
The reasons why last-mile delivery is so expensive is because, until recently, a lot of labor-intensive tasks—both in the office and behind the wheel—were not automated in cadence with technological advances. Tools like a last mile delivery app, or other widgets that enable businesses to enhance the delivery experience, automation is critical.
Today, companies of just about any size, or from any industry, can obtain technologies that enable them to cost-effectively create agile, more economical deliveries with the resources they already have.
3. Choose a technology partner that has a vision
Regarding technology, companies seizing authority over their last mile logistics need to pick technology that is cutting edge, capable, and led by people with a track record of executing their vision successfully in the marketplace. Only then will they be able to accommodate the demands customers now have for convenience, while simultaneously accomplishing productive, cost-conscious methods that continue to promote a positive ROI.
Today's customers consider the quality of their overall delivery experience to be more valuable than the goods they are receiving. Taking this into consideration, it's easy to see how the last mile market is now steered in part by how businesses operate and manage this phase of their organizations. For companies striving to distinguish themselves, they must offer an exceptional level of delivery, enhancing the customer experience, which is built upon a tried and robust solution to managing their last mile logistics.
DispatchTrack is a leading provider of SaaS solutions that enable end-to-end optimization of operations and customer experiences in last-mile delivery. The company's platform includes modular tools for self-scheduling, route optimization, customer communication, real-time tracking and ETA, proof of delivery, and delivery network intelligence and analytics. With customers across North America, Europe, South America, and Asia, DispatchTrack is used by thousands of businesses of all sizes, and many multi-billion-dollar enterprises across a wide range of industries including furniture, appliances, building supplies, food, and beverage. More than 60 million scheduled delivery experiences are powered by DispatchTrack each year. For more information, visit www.dispatchtrack.comKeep Reading: Last mile innovations in 2020 →