Also referred to as local distribution, “middle mile delivery” is a startup term. In logistics, the middle mile refers to the portion of a supply chain that transports items from a port to a warehouse or distribution center.
The reason it is called the local distribution is that it provides cost-cutting options that last mile delivery businesses don’t consider.
You may have heard the term called last mile delivery. In a way, both are parts of the same parcel. The transportation of merchandise from a fulfillment center to a retail shop or a client is known as last mile delivery. Middle mile delivery, on the other hand, transports goods from a plant or port to a fulfillment center.
Want to find out more about middle mile delivery? We are here to help you answer all your questions about what is middle mile delivery and its advantages.
Table of Contents
- What is Middle-mile Delivery?
- Advantages of Middle-mile Delivery
- Comparing Middle-mile and Last-mile Delivery
- How are Organizations Adopting Middle-mile Delivery?
- Are There Any Drawbacks of Middle-mile Delivery?
- Ready to Adopt Middle-mile Delivery?
What is Middle-mile Delivery?
The delivery that involves transportation of goods from a warehouse or distribution center to fulfillment facilities where customers would eventually purchase their items is known as middle mile delivery.
Middle-mile delivery is gaining importance as it has a cost-saving potential that last-mile delivery does not offer.
Consumer products and retail are two industries that can profit from it. In order to guarantee that there are enough inventories on the shelves at all times, sales beat planning is critical.
With competitive pricing and good margins, middle mile delivery may help firms tighten their supply chains and move ahead of the competition.
In middle mile delivery, the warehouse or distribution center and the brick-and-mortar site are likely owned by the same corporation, allowing them to control both ends of the supply chain.
This is critical in decreasing inefficiencies, and many businesses have begun to use their absolute control to save money.
For instance, Walmart uses a vehicular strategy to reduce costs. The business has found “milk runs” the routes that repeat themselves and has begun to use automated vehicles to carry items at a low cost, optimizing the supply chain operations. When these trucks are fully deployed, the retail store intends to slash middle-mile logistical and delivery costs in half.
Advantages of Middle-mile Delivery
The primary reason why middle mile logistics are gaining much traction in the world of the supply chain is because of the various advantages that it offers. Let us take a look at these advantages:
1. Lower cost
You control both ends of the supply chain with middle mile delivery since you own both the distribution facility and the retail outlet. As a result, inefficiencies and errors are reduced, and you have total control over the flow of funds. You can easily cut middle mile costs.
2. Quick change
You can make changes fast and adjust to them since you have total control over the supply chain. It’s simple to expand your business and satisfy changing demands. You can also exert tighter middle mile logistics to optimize all the processes while changing.
For instance, as a result of owning its middle mile operations, Walmart’s capacity to respond to change has risen dramatically. 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 retail behemoths like Walmart and Amazon, who have mastered middle-mile delivery, it’s critical.
The huge retail behemoths can now pass on more velocity and lower landing costs to their customers without decreasing their profits. This gives them a cost advantage in the market.
4. Opportunity for automation
The middle mile of the supply chain is where automated vehicles are most likely to take off. Eliminating the driver allows carriers to re-allocate 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
Comparing Middle-mile and Last-mile Delivery
Within the distribution and supply chain, the words “first mile delivery,” “middle mile delivery,” and “last mile delivery” are used to characterize each leg of the route. There may be numerous middle mile deliveries at times.
Over here, we will discuss how the middle mile delivery and last mile delivery are different:
- The segment from the distribution center to the individual retail outlet is typically referred to as the middle mile delivery in retail. The last mile is always the last stage in the logistics journey.
- This step places the item in the hands of the customer, who might be a person in a B2C business model or a firm in a B2B business model. Last mile deliveries are almost always individualized goods (individual SKUs).
- Middle mile deliveries may involve moving consolidated batches of palletized or crated goods, while last mile deliveries are almost always individualized goods (individual SKUs (stock-keeping units)).
- Since last-mile delivery includes both the store and the client, many shops, especially those servicing a local audience, opt to bring this process in-house.
This opens up possibilities for making last-mile delivery more effective while still being sensitive to local challenges like air pollution and noise pollution. The solution must also consider the retailer’s issues, such as lowering fuel costs and maintaining vehicles.
- In light of the coronavirus pandemic in 2020 and 2021, purchasing in a physical store has been impossible, limited, or undesired. As a result, last-mile delivery is becoming increasingly important in providing outstanding customer service for many firms. It now accounts for a larger amount of the retailer’s operational budget.
- It’s critical to have the correct last-mile approach, which starts with the choice of last-mile delivery trucks. Last-mile delivery cars powered by electricity are becoming increasingly popular since they balance sustainability and environmental awareness with cheaper fuel costs and less vehicle maintenance.
There is now a wide variety of EVs, with fewer restrictions on the range, vehicle speed, battery life, and recharging timeframes.
- Yet, the middle mile is equally important in the current scenario, if not more. This is because of the growing need to cut costs. Additionally, with the advancement of technology, automation is gaining popularity.
As seen by the logistics and supply chain experts, automation is crucial, and it is happening, thanks to middle mile delivery.
How are Organizations Adopting Middle-mile Delivery?
Various organizations are opting for middle-mile delivery. Here we will take the instances of Walmart and Amazon.
Walmart has discovered “milk runs” as a cost-cutting strategy.
To attain affordability in mid-mile delivery, 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.
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 against other big digital brokerage businesses.
Amazon now has more control over its logistics after purchasing heavy-duty tractors from Volvo (in October 2019).
Amazon is beefing up its middle mile delivery infrastructure to keep up with the company’s rapid expansion and deliver items to consumers faster and more effectively at the lowest possible cost.
Upper Route Planner
A Simple-to-use route planner that every one is talking about.
- Save up to 95% of planning time
- Save up to 40% of time on the road
- Plan 500 stops at once
No credit card details required
Are There Any Drawbacks of Middle-mile Delivery?
We can say that middle-mile logistics is uncharted territory, at least in terms of reform. Clearly, it is not easy to disrupt a properly established infrastructure.
Yet, to gain a competitive advantage, it is essential. Using the tools you already have, along with a fresh emphasis on human innovation, you can harness middle-mile logistics and overcome their inherent complexity.
Businesses who start addressing the middle mile, on the other hand, will see their ROI on logistical assets explode.
There are various blind spots throughout the middle mile. One method to eliminate those virtual blind spots is to improve process efficiency. Another way to enhance operational savings is to efficiently leverage your existing tech stack.
Using well-known software solutions, such as Microsoft BI, to assist collect data from throughout your organization is even more successful.
Data is produced in real-time or near-real-time and disseminated among several operational decision-makers; thus, capturing it is critical. It comprises pauses or order-level updates of expected arrival times (ETA) at the driver, customer, dispatcher, or distribution center level.
The first-mile delivery refers to the portion of the journey from the plant or farm to the warehouse or distribution center.
The first mile for retailers may be defined as the distance between the supplier’s warehouse and the retailer’s distribution hub. The first mile in eCommerce might be the travel from the merchant to the courier, who will deliver the goods to the customer’s house, workplace, pick-up location, or smart locker.
It is important for a variety of reasons. Today, logistics is sometimes the last point of contact between a client and a company, making the final mile crucial. It has an influence on the customer’s last-mile experience as well as profitability.
With fierce competition and every logistics provider vying for a piece of the pie, concentrating on the customer experience is essential for success.
Maintain as much transparency as possible with your consumers. Allow all consumer communication channels to be used.
It is necessary to look beyond the static tracking numbers. Empower them to participate in a real-time feedback loop and, if necessary, have them communicate with the driver.
Automating warehouse process management and execution enables more efficient, error-free operations, which speeds up middle-mile deliveries and boosts the company’s competitiveness.
Ready to Adopt Middle-mile Delivery?
Now, we can safely say that middle-mile delivery has various benefits. With very little room for doubt, you should start adopting middle-mile delivery and save money and time!
But we do not want you to do it alone. With software solution like Upper Route Planner, you can simplify the process of route planning and optimizing to save time, money, and effort. Moreover, the software helps you plan efficient routes with multiple locations in just a matter of seconds. With our most efficient route planner, you can:
- Save up to 95% of your planning time
- Serve 40% more customers by optimizing time spent on the road
- Get an eagle-eye view of your delivery operations
Do not wait any more, and try out our 7-day free trial today !