Ever wondered how enhancing customer experience without considering logistics can cost your business?
Most businesses seem to have no interest in understanding last-mile logistics.
That’s why most businesses tend to face downfall by the slightest change in market trends.
Last-mile delivery market is huge and it is expected that the global last-mile delivery market will grow from 108.1 US billion dollars (2020) to 200 US billion dollars (2027).
Last-mile logistics are the most underrated part of the delivery process.
What constitutes last-mile logistics and the challenges involved in it?
What are its impacts on e-commerce and delivery businesses?
How is technical advancement contributing to the fast-evolving last-mile logistics?
In this article we will cover everything about last-mile logistics that you need to know to plan out the best for your business.
Table of Contents
What is Last-Mile Delivery?
Last-mile delivery refers to delivering products from the nearest distribution hub to the required address avoiding any delay in time.
The term last-mile delivery is used for businesses that require instant delivery. Examples of such businesses are food delivery businesses, enterprise supply chains, and businesses that promise one-day delivery.
What are Last-Mile Logistics?
The final delivery process from the distribution center or the facility to the end-user is last-mile delivery logistics.
It allows the shippers to get more products delivered to the consumers faster and cost-effectively.
There is a race to develop new technologies and experimental delivery models to increase parcel volume and deliveries and enhance customer experience.
Importance of Last-Mile Logistics
The processing and delivery of an online order aren’t as direct as it seems. A Series of stages involved in packing and delivering an order as expected.
With the rapid growth in online orders, e-commerce last-mile logistics service is in high demand. This actually accounts for about 21%.
Ultimately, the last-mile logistics determine if the package is delivered cost-effectively and on time to the customer. It will enhance the customer experience, but also it is important to note that this wouldn’t come cheap.
Here are three reasons why last-mile logistics are of utmost importance:
1. Demand speedy deliveries
The pandemic changed the delivery logistics drastically. Consumers now demand quick deliveries even though they are supposed to pay extra costs for same-day delivery.
This alternation in consumer expectations leads to increased delivery speeds. In totality, delivery speed is the key factor in winning and keeping consumers trust.
If your business cannot complete the demands of consumers, they have your competitors as an option.
So, it’s important to upgrade your delivery method without leading your business to loss.
2. Expensive last-mile mistakes
Suppose a business fails to plan last-mile delivery properly, and mistakes increase. Then the costs add up very quickly, making it expensive for the business.
A strategic approach is necessary to tackle this problem, especially in urban areas, which can be very expensive.
An unplanned last-mile delivery can put the delivery trucks in heavy traffic during rush hours, leading to increased failed deliveries, fuel costs, and a clash in truck transit times.
3. Last-mile is the last impression
It is important to keep proper planning for last-mile delivery because the customer’s experience is directly dependent on it.
A customer has nothing to do with the process of placement of an order and its displacement from the warehouse to the nearest distribution center. They will remember how the package got into their hands.
If delivery fails or the package is delivered abruptly, the customer might make up their mind to choose a different store for future purchase.
Losing a customer means decrease in the amount of repeat purchases, and that can be a significant loss for a growing business.
Hence it is very important to plan and watch the last-mile logistics.
Major Last-Mile Logistics Problems
The whole supply chain management is of utmost importance, affecting the last-mile delivery.
Here are some problems that might affect last-mile logistics:
1. Cost of last-mile delivery
Last-mile delivery can cost a business some extra expenses that might affect the normal profits if it happens in bulk.
Although most customers are ready to pay an extra amount for expedited delivery, it remains a costly matter.
The sudden increase in demand, managing temporary staff, and ensuring on-time delivery are key factors influencing delivery costs.
Delay in deliveries will lead to penalties. Moreover, the delivery transportation ending up in heavy traffic or wrong roads during the rush hour will add on failed delivery costs, fuel costs, and a clash between other delivery truck timings.
2. Locating the address
This might seem a pretty simple step in delivery logistics, but it has a lot to do with how the last-mile delivery goes.
Check if the address is valid, locate the address, make a proper draft for all the delivery addresses, and identify areas.
If it is done without proper planning, it will only consume the extra time of the management and yield no results.
Moreover, making sure to divide and assign deliveries, checking the availability of the vehicles and drivers, and loading and arrangement inside the trucks all have to be done carefully and beforehand.
The complications increase in the case of same-day delivery.
Simplifying this process and developing strategies to tackle the issue is a must for a business to overcome challenges in logistics.
3. Route efficiency and optimization
Imagine sending four separate deliveries through the same route four times to deliver four orders. It is as costly as confusing it sounds.
Optimizing a route and choosing the most efficient delivery route is a must to avoid extra charges and delays.
Being well aware of the locations where parcels are to be delivered and further sorting the repeated locations for different addresses is an important step in optimizing routes.
This can be hectic if you don’t use any competent route planner.
Moreover, it is important to select the most efficient route to the delivery locations to save time on the road and cost of fuel and reduce the delivery duration.
So, finding an efficient route that is cost-friendly, saves time and money, provides easy dispatching, and avoids delays in deliveries; can be very hectic if done without proper strategic planning.
4. Unpredictability in transit
Dispatching the product from the warehouse to deliver it to the address can be unpredictable and problematic if done without a strategy.
There can be possible outcomes of vehicle failure, traffic jam, Wrong Route, skipping of address, and many more.
Moreover, the unavailability of proper route planning can also affect the delivery process.
Unpredictable situations can take over the business’s normal functioning, affecting the overall performance.
Compromising on customer experience Can be a major setback for any business running short of Leeds. It can be a setback for any business looking forward to positive growth.
Avoiding it is no solution. Proper planning and laying down strategies to tackle the situation is how a problem can be solved.
Because Covid has already taught us that businesses are unpredictable, At any moment, any small or big thing can happen and disrupt a business completely.
5. Availability of customer
One of the most challenging aspects of delivering a parcel is the risk of failed delivery. And a failed delivery might happen if the customer is unavailable at the residence.
Now the factor that might lead to such a situation, is the unavailability of real-time tracking of the parcel to the customers.
When a customer receives a notification regarding the delivery of the package for the day, they become bound to be available for receiving the parcel.
If an unpredictable Delay occurs in delivery, it not only leads to a bad impression on customers, but it also might end up making the customer go to another store for the next purchase of the same product available in your store.
Avoiding such errors is necessary for a business because this is the most crucial part of the delivery process.
Customers are unaware of the struggle behind delivering the parcel; they care about how the parcel was received and what time the parcel was delivered.
Keeping these key factors in mind can keep a customer engaged for longer terms and business credibility.
6. Meeting fulfillment timeline
As mentioned above, time is the most important element that can succeed or fail a delivery.
There is a timeline assigned for each delivery, and the urge to deliver the orders within the timeline is a challenge in itself.
The timeline is a mixture of a few other challenges—the challenge of avoiding unpredictable delays, The challenge of delivering packages as early as possible.
Same-day delivery is quite a challenge, especially for a business that gets multiple orders in a day for the same-day delivery.
Ensuring faster delivery, competing with e-commerce giants, catering shipments total cost, delivering packages to customer’s doorsteps, and ensuring that last-mile delivery costs or as minimum as possible; Are some of the greatest challenges enlisted in last-mile logistics.
Solutions To Tackle Last-Mile Logistics Challenges
Last-mile logistics might be challenging to tackle as last-mile delivery is the most important step in the entire delivery process.
But a strategic execution of the last-mile delivery process can yield better results.
Here are some last-mile delivery solutions to tackle the challenges of last-mile logistics.
1. Taking cost-effective measures
In order to save on last-mile deliveries, while ensuring customer satisfaction, it is important to replace the traditional methods with cost-effective alternatives.
Delivery operations can be risky. factors like traffic congestion delays in transportation hubs, and an increase in shipment total cost; might end up affecting the delivery operations.
So it is important to take alternatives for all the challenges of the last mile.
Logistics companies can ensure that there is a connection between the management and the delivery personnel.
This will ensure complete visibility and the best use of existing resources.
Route optimization is a smart tool that can help in detecting the most cost-effective routes for delivery.
The product’s journey and on-road time can be minimized using route optimization, in the case of same-day delivery.
2. Avoiding delays and failed deliveries
Avoiding delays in deliveries and reducing the number of failed deliveries can help make final mile delivery a plus point for the last mile logistics.
Enhancing last-mile delivery service by introducing a real-time interface between the customer and the shipment tracking can stand up to the customer’s expectations.
Consumers can be informed regarding the delivery of the product before knocking at the customer’s doorstep, to make sure that they don’t leave their location.
Routing software can provide the best route to reach the final destination without any delays.
In order to deliver packages on time the entire process- a collection of parcels from the warehouse to reaching the customer’s location must go through real-time optimization.
3. Switch to the latest technology
One of the main challenges of last- logistics is reaching out to customer expectations, by enhancing delivery services, without losing profits.
In order to remain competitive, logistics companies must involve smart technology to enhance their delivery services and attract more consumers.
Technical advancements both in transportation as well as in management can prove to be very crucial for the last mile logistics.
The final delivery process from the distribution center or the facility to the end-user is last-mile delivery logistics. It allows the shippers to get more products delivered to the consumers faster and cost-effectively.
Yes, the last-mile delivery business is profitable as the rising consumer demand has increased the demand in the last-mile delivery business.
Challenges like the inefficiency of route planning, lack of real-time visibility, and inability to deliver same-day delivery are the reasons why last-mile delivery is considered time-consuming and expensive.
The best practices in the last-mile delivery service are robust planning, analytics, technology integration, team building, and customer management.
The final step is the end stage of the customer’s buying journey. This is when the package is dispatched from the warehouse to the final destination.
Managing last-mile logistics through traditional methods may turn out to be non-profitable.
So it is important to switch to a good Route planner app that performs all the Basic functions for delivery companies.
How Is Upper Route Planner Helpful In Simplifying Last-Mile Logistics?
Upper Route Planner is the leading route planning and optimizing software. It is all-in-one software to meet business requirements regarding route planning, quick dispatch, and much more.
Upper Route Planner is not just a cost-effective investment that a business can make to manage the logistics business effectively and simplify the delivery process. It is also known to boost operational efficiency and productivity.
To learn more about the software, its features, and benefits, start a 30 days FREE Trial to take your business to the next level.