Have you ever considered the potential costs of improving customer experience without taking logistics into account?
Interestingly enough, the majority of businesses don’t seem all that interested in comprehending last mile, or final-mile, logistics.
This disinterest unfortunately leaves them weak to a changing market or shifting consumer preferences.
Whether those businesses want to admit it or not, the market is changing. In particular, last-mile logistics is substantial and poised to continue growing from 108.1 US billion dollars (2020) to 200 US billion dollars (2027).
Yet even with this near-doubling, last-mile deliveries continue to be overlooked as a part of the whole chain of delivery.
At Expedite Delivery System, we pride ourselves on not only our last-mile logistics, but on making sure our customers are well-informed on how this affects their business.
That’s why we’re taking the time today to answer some fundamental questions all about last mile logistics, like:
- What is considered last-mile logistics, and what are some of the challenges?
- How do last mile logistics impact e-commerce businesses? And delivery business?
- How is last-mile logistics being affected by technological changes?
We’ll cover the answers to these questions and more to help your business get an edge with your last mile-logistics strategy.
About Last-Mile Delivery
The idea of last-mile delivery refers to the last portion of the delivery process. This means getting products from a distribution hub to the final address in the fastest time possible.
Industries that consider last-mile delivery a part of their business model are those that need instant delivery. This can be everything from local food delivery companies and medical facilities to enterprises with national and international supply chains.
How Last-Mile Logistics Work
Last mile logistics encompasses the reception of the product from a distribution center and its transport to the final destination, end-user, or customer.
A well-organized system allows consumers to get their products more quickly and shippers to deliver them more efficiently.
In this process, new technologies are regularly being developed and new delivery models experimented with to improve delivery volume, speed, and the experience of the customer.
Why Last-Mile Logistics Is Important
If only processing and shipping online orders was as simple as it seems. The truth is that a number of steps must be taken to get an order out the door and delivered.
An increasing number of those orders now belong to e-commerce, making e-commerce last-mile logistics a growing market. These orders now account more for than 20% of all last-mile logistics.
Here are our three top reasons why last-mile logistics are so significant for businesses.
1| On-Time And Speedy Deliveries
Ever since the pandemic, how we think about deliveries as consumers and as companies has changed.
As consumers, there exists now an expectation for quick deliveries. Though these should be accompanied with an extra charge, especially for same-day delivery, that tolerance is changing, too.
With that change, it is the companies that can deliver faster and more affordably that win repeat business.
If your business can’t compete on speed or affordability, you leave the door open to your competitors.
2| Last-Mile Logistics Can Get Expensive
When planned well, last-mile logistics can be incorporated into a business’s delivery plan at an economical rate. When planned poorly, or not planned at all, mistakes increase and costs can skyrocket to cover up those problems.
Especially in urban areas, a thorough strategy or experienced partner is necessary to keep these mistakes from happening. If not, unplanned deliveries – think a truck stuck in rush hour traffic – leads to higher wait times, higher fuel costs, and lower customer satisfaction.
3| Last Mile Is Your Business’s Last Impression
How your customer receives their package is the last chance you have to leave a good impression with them.
Apart from the actual item itself, this process is one of the most important touchpoints your customer has. Since they don’t know or deal with the order’s placement, displacement, or delivery, what they’ll think about is how they actually got the package.
Should a package come late, in poor shape, or with some lack of communication, they may just decide ordering from you is not worth the hassle.
As it is cheaper to keep customers than find new ones, losing out on a customer’s repeat purchases can hurt a growing business. That’s why knowing all about last-mile logistics will help you avoid issues like these.
Additional Last-Mile Logistics Problems
In addition to the broader problems listed above, there are specific problems that hamper last-mile logistics, too.
1| Last-mile delivery costs
If treated as a one-off or occasional problem, last-mile deliveries can end up eating away at a company’s profits.
Customer willingness to pay more for faster deliveries is one thing. Being able to pull it off consistently – and cost-effectively – is what matters more.
When demand increases, your costs might include additional staff, managing more products, and overseeing more vehicles.
Managed poorly or without the proper partner can lead to delivery delays and consequences. Just think about what happens when a vital shipment of product is stuck on the other side of town as a traffic jam starts. From canceled orders to lost customers, last mile delivery logistics can have long-term costs.
2| Locating the address
Having an address to deliver to is a well-understood part of the delivery process – it sounds obvious, but you can’t make a delivery without one.
Yet locating the address isn’t always that simple. An address needs to be valid, needs to be findable, and needs to accommodate the size of the delivery truck.
Done without advance planning, locating the address can become a sink hole for time and resources.
When you scale up from one address to many, the potential for complication increases, too.
From dividing and assigning deliveries and vehicle and driver availability to loading and arranging the trucks, everything is dependent on being able to locate and understand a delivery address.
Overcoming last-mile logistical challenges starts with simplifying these processes and creating a long-term strategy.
3| Efficient Delivery Routes
Without a plan, a delivery provider could send three deliveries along the same route to the same destination. Not only expensive, this represents a lack of efficiency.
Efficient routes, on the other hand, help to avoid redundancies, delays, and unnecessary charges.
This is done by understanding where deliveries are going, being aware of repeat locations, and sorting for urgency.
By saving time while driving, you do more than just make your customers happy. The trucks spend less time on the road, meaning less fuel costs.
This is certainly a challenge without planning or without a delivery partner, though the benefits are clear: lower costs, faster deliveries, improved customer experience.
4| Real-World Complications
In theory, you could set up the perfect route from the warehouse to the final destination.
Unfortunately, the real world is rarely that perfect. With the traffic, vehicle problems, construction, and the occasional wrong turn, delivery routes are never that seamless.
Without proper route planning that can adapt to real-world situations as they happen, your last-mile logistics process can suffer.
These delays can lead to customer complications that hamper a business’s growth. This unpredictability is part of the game, and businesses that want to succeed need to find a strategy to deal with it.
5| Customer Availability
As much of this article has been about customers getting their parcels, there is another side of this relationship that is challenging: customers being there for their parcels.
When a customer isn’t available at their business or residence, we risk a failed delivery. This can happen for a number of reasons. One of the most common? The lack of real-time parcel tracking.
With notifications that keep a customer up-to-date during the delivery, they know when to be available.
If something was to happen during the delivery and the customer couldn’t be notified, that could end up creating a negative impression for the customer.
For one, they may be kept waiting for a package that doesn’t show up. Or they could leave, not knowing when the package is going to arrive. Either way, those lead to a failed delivery.
It’s important for businesses to avoid these last-mile logistics problems whenever possible.
Customers aren’t interested in everything that goes into delivering their package. They want their package at the time you say it’s going to be there.
Being able to consistently meet these expectations will help you build customer confidence and business engagement.
6| Fulfilling Delivery Timelines
Timing is one of the most important elements of a delivery’s success or failure.
Each delivery has a timeline. How your business meets those timelines says a lot about how successful your business can become.
Fulfilling a delivery timeline comes with its own challenges, including real-world delays, customer availability, and the delivery route.
Same-day deliveries can add another degree of difficulty.
Other last-mile logistics challenges include keeping costs as low as possible, competing with larger providers, and guaranteeing delivery direct to customers’ homes.
How To Solve Last-Mile Logistics Challenges
Being aware of the challenges you face with last-mile logistics is an important first step. Resolving those problems through planned action is an equally important second step, one that can lead to better, more sustainable results.
Below are some of our recommendations for last-mile logistics solutions.
1 Strive for Cost-Effective Strategies
A strategy means thinking of last-mile logistics as not just a one-off problem but a recurring situation.
To save money when it comes to last mile deliveries, create a sustainable plan going forward. This keeps in mind customer satisfaction, tricky delivery operations, traffic delays, fuel costs, and more.
When you can factor all that into your operation, you can create a plan forward.
With accomplished logistics companies, you’ll be sure there’s a connection between both the management and the delivery team. That communication leads to a solid use of your resources and an understanding of the whole chain.
With smart route optimization, you’ll ensure that even the best-laid plans have a great backup, keeping costs down even when on-road complications come up.
2| Avoid Delays and Missed Deliveries
One way to think about last-mile logistics is the end goal: happy customers.
In its simplest sense, your customers will be happy if they get their packages when you say they’re going to get them. On your end, that means avoiding delays and avoiding failed deliveries.
There are many mechanisms to do so, including real-time communications, shipment tracking, and transparent delivery windows.
When customers are aware of their product’s status, they can stay and wait for it. Route optimization technology can help the product arrive on time, even with real-world complications.
3. Embrace technology
It is one thing to succeed at meeting your customers’ expectations with enhanced deliveries. It is another to do so without losing profits.
Maintaining your competitive edge in the space and increasing profits often comes down to incorporating technology in your offer.
This can mean advances in transportation, management, and tracking, all which serve to improve your services and attract more customers.
Frequently Asked Questions About Last-Mile Logistics
What are last-mile logistics?
Last mile delivery logistics refers to the last delivery procedure from the plant or distribution hub to the end customer. It enables shippers to deliver more goods to customers more quickly and affordably.
What is the last mile in the supply chain process?
The last step is the culmination of the customer’s purchasing process. It refers to the transportation of the shipment from the warehouse to where the customer happens to be.
Is the last-mile delivery business profitable?
Yes, the last mile delivery industry is profitable due to the increase in demand brought on by expanding consumer demand.
What are last-mile logistics challenges?
Challenges include the difficulty of route planning, the absence of real-time visibility, and the impossibility of same-day delivery. These can add up to make last-mile logistics more expensive and time-consuming for businesses.
What are the best practices for a last-mile delivery?
Effective planning, analytics, technology integration, team building, and customer management are a few best practices for last-mile logistics.
How Is Expedite Delivery System Improving Last-Mile Logistics?
From courier services and medical logistics to same-day delivery, Expedite Delivery System is the mid-Atlantic’s premier last-mile logistics operator. Using the latest technologies, including Track and Trace, Event Notification, and Digital Chain of Custody, we offer our clients professionalism and peace of mind.
To find out more about Expedite Delivery System’s last-mile logistics solutions, get in touch with our expert team today.