Last-mile delivery and its Importance
Last-mile logistics are among the most misunderstood parts of transportation networks. If one has to compare the various legs of logistics delivery to a relay race the last-mile will be the person who runs with the baton to the finish line and most of the time he is expected to run the last leg fast to make up for all others legs that were off target and this leg is always under pressure. On the surface, the last mile may not seem very important, but it can make up 28% of a shipment’s total cost. In addition, growth in e-commerce is radicalizing how shippers view last-mile logistics. To understand wide-ranging benefits and key concerns inherent in last-mile logistics, your organization needs to understand what constitutes last-mile logistics, and its challenges, how it impacts e-commerce and omnichannel supply chains, why it is evolving, and how new technology improves it.
What is last mile delivery?
In a product’s journey from the warehouse shelf to the back of a truck, to a customer doorstep, the “last mile” of delivery is the final step of the process — the point at which the package finally arrives at the buyer’s door. In addition to being a key to customer satisfaction, last mile delivery is both the most expensive and time-consuming part of the shipping process. Most often, last mile logistics involves the use of parcel or small package carriers to deliver products to consumers. Moreover, shippers of all sizes have identified last mile logistics as the cornerstone to driving growth and profitability.
What are the costs of last mile delivery?
As a share of the total cost of shipping, last-mile delivery costs are substantial — comprising 28% overall. And with the growing unfairness of “free shipping,” customers are less willing to foot a delivery fee, forcing retailers and logistics partners to shoulder the cost. As such, it’s become the first place they’re looking to implement new technologies and drive process improvements.
Last Mile Comes with Unique Challenges
There are growing pains in last-mile logistics. Urban delivery may be difficult with navigating traffic and parking regulations, and global delivery challenges may dramatically increase last mile logistic costs. Large products may require assembly and skilled unpacking upon delivery, so shippers must rethink how they can ensure the final product is an accurate reflection of what was sold. While hundreds of last-mile carriers exist, not all offer assembly options, which might be categorized as an added service. Other products may require specialized installation by skilled technicians. Yet, more bulky items are moving from traditional retail to consumer direct shipping models, and consumers want speed and visibility in every stage.
Every stage of the logistics process of delivering goods is crucial from the time a parcel leaves the hands of the Sender up to the moment it arrives at its destination.
While each step of the way should be taken seriously, there is no point more high-priority than that of the last mile delivery stage, where the goods from a transportation hub move to their final delivery destination.
Important Factors to Consider in Choosing a Last Mile Delivery Service:
- Fast delivery – This should be on the top of your list when offering to provide the best last-mile delivery solutions. Consumers would always go for fast delivery service, with most even preferring same-day delivery.
- Precise order tracking – The flow of information within the last-mile delivery process is crucial particularly for consumers since they would always want to know the status of their delivery.
- Security and insurance – There is a considerable risk involved whenever consumers decided to leave their purchased goods in your hands and trust you to have them delivered in a timely manner.
- Specialization – At the very least, there should be one feature about your service that sets you apart from the competition. A few more specializations wouldn’t hurt, too.
- Convenience – Gone are the days when customers would have to bring their parcels to the post office to have them shipped. It has become more convenient since then, with courier companies putting up satellite branches in strategic locations for easier access.
- Technology – Reaching a destination on time given the city traffic conditions is a big challenge and the use of technology like automatic route planning that helps the driver select the next drop point based on the best available route and current traffic conditions helps achieve better results.
– Murari S