What is Middle Mile Delivery? Definition, Benefits, and Challenges

What do you think forms the backbone of modern global commerce?

Supply chain logistics helps deliver finished goods from their origin to the destination, i.e., end customers. 

While manufacturers emphasize shipping goods as demanded, retail stores focus on delivering them to customers while ensuring delivery efficiency.

The middle leg of this journey, commonly known as middle-mile delivery, is often underappreciated when it comes to making the end-to-end supply chain successful.

This brings us to a question: 

What is middle mile delivery?

If you seek the answer, you are in the right place.

This blog discusses the concept of middle-mile delivery, its benefits, and the challenges it may present. 

So, stay tuned.

What is Middle Mile Delivery?

Middle-mile delivery (also referred to as second-mile delivery) is the movement of products from warehouses or distribution centers to a fulfillment center or retail store.

It serves as a critical link in the supply chain that helps deliver goods to their final destination, from where they eventually reach end customers. 

Any delays or unfortunate incidents in this phase can disrupt the entire supply chain. Therefore, it is imperative for fleet managers to streamline middle-mile delivery.

Middle Mile vs Last Mile: How Do They Differ?

Middle mile delivery is the process of shipping products from the manufacturer’s factory or farm to the point of origin, while last mile delivery is where products are directly handed over to their customer from the fulfillment center.

In middle-mile delivery services, shippers collaborate with truckers via an automated delivery management process. In last-mile parcel deliveries, shippers deliver the goods to the buyer’s location.

Middle mile delivery works with the help of advanced route management technology to manage timely pickups, schedule deliveries, and fleet management. Last mile delivery needs only an efficient route to reach the customer’s location.

How Does Middle Mile Delivery Work?

In middle mile delivery, warehouses or distribution centers and brick-and-mortar sites are likely owned by the same corporation, allowing them to control both ends of the supply chain.

With competitive pricing and good margins, an effective middle-mile delivery system may help firms tighten their supply chains and gain an advantage over the competition.

For instance, let’s assume you are in the delivery business where you have a mediator who deals with your products. So, you can directly sell them to mediators to find the right customers or deliver them to clothing stores.

Here, products are released from the warehouse and transited to the customer fulfillment center. Shipping products from the manufacturing farm to distribution centers constitutes the middle-mile delivery.

What are the Benefits and Challenges of Middle Mile Delivery?

Every business has several benefits and challenges. How you manage and tackle them sets you apart from the market. The middle-mile transportation stages have various benefits and challenges for fleet management, as follows.

Benefits of middle mile delivery

The primary reason why middle mile logistics are gaining much traction in the supply chain process is because of the various advantages that it offers. Let’s take a look at these advantages:

1. Lower Cost

You manage both ends of the supply chain with middle mile delivery since you own both distribution hubs and retail outlets. As a result, inefficiencies and errors are reduced, and you have total control over the flow of funds. You can easily achieve cost savings.

2. Ability to accept unexpected changes

Since you have total control over the supply chain, you can make changes quickly and adjust to them. Expanding your business and satisfying changing demands is simple. You can also exert tighter middle-mile logistics to optimize all the processes while changing.

For instance, Walmart’s capacity to respond to change has risen dramatically as a result of owning its middle-mile operations. Consolidation and optimization among organizations or partners rise when the margin of error decreases.

3. Countering competition

Many businesses use middle mile delivery to save money, which allows you to keep up with your rivals. To compete with e-commerce behemoths like Walmart and Amazon, who have mastered the middle mile delivery process, it’s critical.

The giant retailers can now pass on more velocity and lower landing costs to their customers without decreasing their profits, giving them a cost advantage in the market.

4. Opportunity for automation

The distribution vehicle is most likely to take off in the middle mile of the supply chain. Eliminating the driver allows carriers to reallocate precious driver resources to the last mile, where drivers are needed to deliver products and run the truck. Given the heightened danger of urban areas due to the density of people and things, drivers are needed to deliver products and run the truck.

5. Efficient service

With middle mile delivery, you can perform on-demand service, which would be a big boost to the delivery process. Such flexible delivery service may help providers to mobilize whenever the need arises. Eventually, it accelerates the distribution process, and efficient delivery operations are easy to perform.

Drawbacks of middle mile delivery

Middle mile delivery comprises some drawbacks that fleet managers can manage with proper planning. They are:

1. Late delivery factors

Sometimes, deliveries are delayed due to natural or human factors. Unavailability of warehouse shipment on time, bad weather, festival crowds, unexpected traffic, and other natural factors can delay middle-mile deliveries.

Also, lack of maintained delivery vehicles, not tracking fuel usage, lack of fuel, etc, are the human factors that delay deliveries from warehouses to fulfillment facilities. By fixing these mistakes, you can streamline your warehouse management system to avoid delayed deliveries.

2. Lack of route planning

When the delivery trucks are dispatched from the manufacturing plant to the fulfillment centers, the distribution drivers need a proper route to follow because they must complete deliveries to many fulfillment centers across the city. 

Lack of route planning confuses the drivers about which delivery route to follow. Covering unplanned delivery locations may cost you more because of extra fuel usage, and deliveries may also be delayed. So, creating a middle-mile delivery strategy can help you overcome distribution planning-related problems.

3. Driver shortage

Keeping middle-mile delivery drivers on standby is necessary because you never know if an urgent delivery will arise or if a delivery driver will suddenly take a leave of absence. 

Further, sometimes, due to work overload, deliveries are in excess, but there is a scarcity of delivery persons. So, driver shortage is a major drawback of middle-mile delivery.

Real-World Examples of Companies Adopting Middle Mile Delivery

Various organizations are opting for middle mile delivery. Here, we will take the examples of Walmart and Amazon.

1. Walmart

Walmart has discovered “milk runs” as a cost-cutting strategy.

To make mid-mile delivery affordable, they have begun to deploy autonomous vehicles to convey items on fixed routes.

Walmart estimates that once these cars are fully deployed, middle mile logistics and delivery costs will be cut in half.

2. Amazon

After a successful test in five Northeastern states, Amazon has expanded its new freight brokerage service to all 48 contiguous US states.

It has strengthened Amazon’s position in the marketplace compared to other big digital brokerage businesses. 

After purchasing heavy-duty tractors from Volvo, Amazon now has more control and visibility over its logistics process (in October 2019).

Amazon is beefing up its middle mile delivery infrastructure to keep up with the logistics companies’ rapid expansion and deliver items to consumers faster and more effectively at the lowest possible cost.

Optimize Your Middle Mile Delivery Routes with Upper

Since many tech giants have started using advanced technology, it has now been easier to deal with any modern-day problems. Similarly, optimized routes can be done with the help of route optimization software. 

Online Route planners like Upper can help you find optimized routes within a minute. It allows for generating a route plan that includes up to 500 extra stops. Whether it is a middle mile delivery or last mile delivery, you can use Upper to plan and optimize routes quickly.

The advanced distribution route optimization software can churn out unlimited optimal routes to facilitate middle mile delivery. It provides a helping hand to the delivery manager with an automated process that doesn’t need manual intervention.

Ready to Streamline Your Middle Mile Delivery?

Now you know that middle-mile delivery has various benefits. If you are planning to start a new business or make improvisations in the existing business, this is the right time!

To help you tackle any route planning or middle mile delivery optimization-related problems, Upper Route Planner has got your back! With Upper, you can simplify optimizing middle mile transportation routes to save time, money, and effort. Moreover, the software helps you plan and optimize routes with multiple locations in seconds.