Last-Mile Automation Explained: Optimizing the Final Stage of Delivery

keyKey Takeaways:
  • Last-mile automation uses technology to optimize the final stage of delivery, streamlining operations, cutting costs, and improving customer experiences.
  • Last-mile delivery automation addresses common challenges like delays, high costs, and lack of visibility in delivery operations. It offers businesses cost savings and improved efficiency.
  • Some of the technology-based software and solutions that help to automate the last-mile delivery process include route optimization software, autonomous vehicles, automated sortation systems, smart lockers, and advanced tracking systems.

From soaring fuel costs and route planning complexities to meeting customer expectations for prompt deliveries, the final leg (from transportation hub to final destination) of the supply chain can be an operational mess. 

“According to a recent study by McKinsey, last-mile delivery accounts for 53% of total delivery costs and 25% of total supply chain costs.”

Common challenges that businesses face during last-mile delivery include:

  • Delays and inefficiencies due to manual route planning processes
  • High delivery costs and vehicle maintenance expenses
  • Inability to accommodate real-time changes or unexpected events
  • Lack of visibility and communication with customers about delivery status

“The surge in e-commerce sales, which is expected to grow by 9.4% in 2024, amplifies these challenges, with customers demanding quicker deliveries.”

That’s where last-mile automation emerges as a powerful solution to address these challenges. This helps businesses slash their last-mile costs and make deliveries faster and more convenient.

So, in this comprehensive blog post, we will understand the concept of last-mile delivery automation. We’ll explore key technologies relating to last-mile automation, its benefits, challenges, and industry trends.

Join us as we tell you the secret to efficient last-mile logistics.

What is Last-Mile Automation?

Last-mile automation refers to the use of technologies and processes to speed up, improve, and automate the final stage of the delivery process, known as the “last mile.” This typically involves automating the delivery of goods from a transportation hub or distribution center to the end customer’s location.

It involves tools that plan efficient delivery routes, track packages in real time, manage inventory, and ensure timely deliveries. These tools ultimately save time and money, making the process smoother for businesses as well as customers.

Here’s a breakdown of the key concept:

  • Last-mile: This describes the final leg of a product’s journey in the supply chain.
  • Automation: This refers to the use of technology to automate tasks and processes, reducing the need for manual intervention.

In simpler terms, last-mile delivery automation leverages technology to make last-mile deliveries faster, cheaper, and more efficient.

6 Technologies and Solutions to Automate Last-Mile Deliveries

Last-mile automation is made possible by a convergence of high-end technologies and innovative solutions. From self-driving vehicles to intelligent routing systems, these advancements are improving how goods are delivered to our doorsteps. 

Let’s dive into the key last-mile delivery technology driving this transformation:

1. Autonomous vehicles and drones

Imagine a future where your package is delivered not by a human courier but by a self-driving vehicle or a drone flying overhead. 

This futuristic vision is rapidly becoming a reality with the advent of autonomous delivery vehicles, as well as unmanned aerial vehicles (UAVs) or drones.

Autonomous vehicles, equipped with advanced sensors, cameras, and navigation systems, can navigate roads and neighborhoods without human intervention. 

Companies like FedEx and Nuro have partnered to explore the use of autonomous vehicles for automated last-mile deliveries.

Conversely, delivery drones offer a unique solution for reaching remote or hard-to-access areas. These unmanned aerial vehicles can fly over traffic and obstacles, providing a direct route to the customer’s doorstep. 

Companies like Wing (owned by Alphabet Inc.) and Zipline are already using drones for deliveries in various regions, with promising results.

While automated-guided vehicles and drones face regulatory challenges and public acceptance hurdles, their potential to transform last-mile delivery is undeniable. 

2. Robotics and Autonomous Mobile Robots (AMRs)

Ground-based robotics and autonomous mobile robots (AMRs) are another innovative solution reshaping last-mile delivery. These advanced machines are designed to navigate sidewalks, building entrances, and pedestrian environments, carrying packages directly to customers’ doorsteps.

Companies like Starship Technologies, Udelv, and Kiwibot have deployed fleets of autonomous delivery robots that can traverse short distances, offering contactless delivery option.

These robots use advanced sensors and machine learning algorithms to navigate obstacles and find the most efficient routes to their destinations.

Use case of Autonomous Mobile Robots (AMRs) in warehouses and distribution centers:

In warehouses and distribution centers, AMRs are refining material handling and package sortation processes

These efficient delivery robots can autonomously transport goods, load and unload vehicles, and streamline last-mile operations. It helps reduce the need for manual labor and increases efficiency.

3. Route optimization and fleet management software

When it comes to efficient last-mile delivery, what really makes a difference are tools like route optimization and fleet management software.   

These advanced systems leverage complex algorithms and real-time data to plan the most efficient routes, minimizing travel time, fuel consumption, and operational costs.

Routing software, like Upper, considers various factors, such as traffic conditions, delivery preferences (like time/delivery windows for deliveries), and vehicle capacities.

By crunching vast amounts of delivery data, it can adjust routes and provide drivers with turn-by-turn guidance, ensuring timely and cost-effective deliveries. 

Fleet management software complements route optimization by providing real-time visibility into vehicle locations, driver and delivery performance, and delivery status. This visibility enables businesses to make informed decisions, respond quickly to unexpected events, and boost customer satisfaction through proactive communication. 

Moreover, Upper offers real-time tracking and visibility into delivery operations, allowing businesses to stay on top of their operations.

Last-Mile Automation Made Easy

With Upper, you can plan efficient routes, track vehicles, update customers, collect proof of delivery, and analyze routing reports.

4. Automated sortation and loading systems

Automated sortation, loading, and warehouse management systems in warehouses and distribution centers play a crucial role in streamlining last-mile delivery operations. 

These advanced systems use robotics, conveyor belts, and intelligent last-mile automation software to efficiently sort, consolidate, and load packages, reducing manual labor and errors.

  • Automated sortation systems can rapidly scan and route packages based on their destination, ensuring that shipments are sorted accurately and efficiently. This not only speeds up the parcel delivery process but also minimizes the risk of misrouted or lost packages.
  • Intelligent loading systems, on the other hand, optimize the loading of delivery vehicles by considering factors such as package dimensions, weight, and delivery sequence.

By automating these processes, businesses can increase throughput, reduce operational costs, and ensure a smoother and more reliable last-mile delivery experience for their customers.

5. Locker systems and smart lockers

Missed deliveries and reattempts are common challenges in last-mile delivery. However, locker systems and smart lockers offer customers a convenient solution for retrieving their packages at their convenience. 

These secure, unattended delivery options allow carriers to drop off packages in a designated locker, which customers can access using a unique code or digital key.

Smart lockers take this concept a step further by integrating advanced features such as real-time monitoring, temperature control, and automated notifications. 

Locker systems and smart lockers eliminate the need for customers to be present during delivery attempts, reducing the chances of missed deliveries and reattempts and saving time.

6. Last-mile visibility and tracking

Every customer wants to know real-time updates about their deliveries. Last-mile visibility and tracking solutions address this need by providing end-to-end visibility into package locations, delivery progress status, and estimated arrival times. 

Advanced tracking systems leverage GPS, RFID, and other wireless technologies to monitor packages throughout the delivery journey.

Upper provides real-time tracking and accurate ETAs, which can be conveyed to customers through automated, customizable notifications. It helps keep customers informed throughout the delivery process.

But it’s not just about keeping customers informed; last-mile visibility also empowers businesses to make informed decisions and respond promptly to any issues or delays. 

By having a comprehensive view of their delivery operations, companies can proactively communicate with customers. They can easily manage customer exceptions and continually optimize their processes for improved efficiency.

5 Key Benefits of Last-Mile Automation

The adoption of last-mile automation technologies offers numerous advantages for businesses operating in the delivery and logistics sectors. 

Let’s explore some of the key benefits of last-mile automation:

1. Increased delivery efficiency and speed

Imagine a world where your delivery routes are optimized to perfection, minimizing unnecessary detours and idle time. 

Route optimization software leverages advanced algorithms and real-time data to plan the most efficient routes. This intelligent planning translates into faster delivery times, allowing you to fulfill more orders in less time.

But it’s not just about speed; automation also brings remarkable consistency. 

By minimizing human errors and ensuring accurate address validation, you can reduce failed delivery attempts, reattempts, and associated costs.

2. Cost savings and operational optimization

Last-mile delivery is notorious for being the most expensive and resource-intensive segment of the supply chain. However, with automation, businesses can significantly reduce these costs. 

How is this achieved? 

Route optimization software helps minimize fuel consumption by identifying the shortest and most efficient routes. 

Autonomous vehicles and robots reduce labor costs associated with human drivers and delivery personnel. This is one of the reasons why the autonomous last-mile delivery market is projected to reach USD 4.2 billion by 2030.

Automated sortation systems streamline warehouse operations, reducing errors and increasing throughput.

By optimizing these processes, businesses can maximize resource utilization, lower operational expenses, and ultimately improve their bottom line.

3. Improved customer experience and satisfaction

Last-mile delivery automation plays a crucial role in enhancing customer satisfaction by enabling:

  • Accurate delivery time estimates: With real-time tracking and visibility solutions, customers can receive precise updates on when their packages will arrive, eliminating uncertainty and frustration.
  • Convenient delivery options: Smart locker systems and attended delivery options allow customers to retrieve their packages at their convenience, reducing missed deliveries and reattempts.
  • Proactive customer communications: Automated notification systems keep customers informed about their delivery status, fostering transparency and trust.

Can you imagine the relief of knowing exactly when your much-anticipated online purchase will arrive without having to take time off work to wait for the delivery? 

Automated last-mile delivery makes this dream a reality, elevating the overall customer experience.

4. Scalability and handling peak demand

The ability to handle fluctuations in customer demands is crucial for businesses, especially during peak seasons or promotional events. Last-mile delivery automation solutions provide the scalability and agility required to adapt to these fluctuations seamlessly.

Automated route planning and optimization systems can quickly accommodate additional stops and recalculate efficient routes, ensuring timely deliveries even during high-volume periods.

Robotics and autonomous vehicles can be easily scaled up or down based on demand, providing a flexible workforce without the constraints of human resources.

With automated last-mile delivery, businesses can confidently take on more orders and expand their operations without compromising the quality of their delivery services or incurring excessive costs.

5. Environmental sustainability and reduced carbon footprint

Sustainability is a fundamental responsibility for businesses across industries. Last-mile automation significantly reduces the environmental impact of delivery operations.

Optimized routes and autonomous vehicles reduce unnecessary travel and idling, resulting in lower fuel consumption and decreased carbon emissions. 

Additionally, electric and alternative fuel vehicles can be seamlessly integrated into automated delivery fleets, further minimizing the carbon footprint.

Frequently Asked Questions

Last-mile delivery refers to the final stage of the delivery process, where goods are transported from distribution centers or fulfillment centers to the customer’s doorstep or designated delivery location.

Last-mile delivery is essential in logistics because it directly impacts customer satisfaction and loyalty. It represents the final touchpoint between businesses and their customers, influencing their overall experience with the brand.

Some common challenges in last-mile delivery include:

  • Delays and inefficiencies due to manual route planning processes
  • High delivery costs and vehicle maintenance expenses
  • Inability to accommodate real-time changes or unexpected events
  • Lack of visibility and communication with customers about delivery status

Businesses can start implementing last-mile automation solutions by:

  • Identifying their specific pain points in the last-mile delivery process.
  • Researching and evaluating available automation technologies and solutions.
  • Partnering with reputable vendors or technology providers that offer customizable solutions.
  • Conducting pilot tests or trials to assess the effectiveness of the automation solutions.
  • Training employees and drivers on how to use the new technologies effectively.

Some potential challenges or obstacles to adopting last-mile automation include:

  • Initial investment costs in acquiring and implementing automation technologies.
  • Integration complexities with existing systems and infrastructure.
  • Regulatory and compliance issues related to autonomous vehicles, drones, and data privacy.
  • Resistance to change or lack of buy-in from stakeholders within the organization.
  • Technical limitations or compatibility issues with certain automation solutions.

The Upper Hand in Last-Mile Delivery

From autonomous vehicles and delivery drones to intelligent delivery routing systems and real-time tracking solutions, these last-mile delivery technologies are improving how goods are transported to our doorsteps. 

As customer expectations for faster, more convenient, and transparent delivery experiences continue to rise, the adoption of last-mile automation solutions is becoming imperative.

So, if you’re ready to transform your last-mile delivery operations, consider trying Upper’s automated route optimization software. 

With its advanced algorithms, real-time tracking, customizable notifications, and detailed analytics, Upper streamlines routes, cuts fuel and transportation costs and enhances your customers’ delivery experience.

Experience the power of last-mile automation firsthand by signing up for Upper’s . No credit card details are required, and you can explore the full range of features to see how Upper can streamline your delivery processes and drive your business forward.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.