In logistics, the last leg of a shipment’s journey is often the most challenging of all. Instead of going to a warehouse or distribution center, the shipment must now be delivered to its final destination. And whether it’s someone’s doorstep or the loading dock of a business, that final destination is different for every shipment.
However, effective last mile delivery is also a major part of meeting customer expectations. To ensure that your company is able to manage this all-important link in the supply chain, we’ll go over everything you need to know about last mile delivery and how to do it effectively.
Last mile delivery explained
Also known as final mile delivery, last mile delivery is the concluding segment of the supply chain where shipments are delivered from a local distribution center to the customer’s residence. It typically only requires short travel distances, but since each shipment must go to a unique location, it also tends to be the most logistically challenging part of the delivery process.
Compared to the rest of the delivery process, last mile delivery is also much more customer-centric. Things like delivery windows and real-time tracking updates have to be managed with the customer in mind.
Finally, last mile delivery is unique because it can encompass a lot of different delivery scenarios. Whether it’s an e-commerce order that needs to be delivered to a residential address, food and grocery deliveries that have to be dropped off within tight time constraints, or bulky item deliveries that require special handling, the last stage in the delivery process is inherently challenging.
The importance of last mile delivery
In an increasingly competitive retail environment, delivery is often a key differentiator, helping set your company apart from the competition. And, when it comes to meeting customer expectations, last mile delivery is the most important part of the process.
If a delay happens early in the shipping process, customers may be frustrated. However, they’re much more likely to be unsatisfied if a delay happens on the day that they’re waiting for their order to arrive. The final delivery experience is also often the only face-to-face encounter that a customer will have with your business. Even if it’s a third-party carrier that they’re interacting with, this interaction is still an important touchpoint when it comes to your brand reputation.
Challenges in last mile delivery
Last mile delivery is a vital part of any company’s supply chain, but it’s also something that can present more than its fair share of challenges. Some of the most common challenges include:
High costs
Shipments may not have very far to travel during the last mile, but the delivery costs still tend to be higher than any other part of the delivery process. The need for individualized routes and stops makes last mile delivery the most logistically challenging (and thus expensive) part of the process. On average, last mile delivery accounts for a whopping 53% of a shipment’s delivery expenses.
Traffic congestion
In urbanized areas where businesses and most residences are located, heavy traffic can often significantly slow down last mile delivery. It can also make it much more difficult to predict delivery times. For shipments that are going to rural areas, this isn’t usually as much of a concern. However, deliveries to rural areas often present their own set of challenges as well, including things like longer routes and poor infrastructure.
Delivery complexity
All the different complexities that last mile delivery entails can make it a real headache for logistics professionals to manage. And this comes at a time when delivery expectations are at an all-time high. With same-day and next-day shipping now the expectation, final mile complexities and challenges are all the more magnified.
Environmental concerns
Last mile delivery requires a lot more vehicles on the road than any other phase of the delivery process, meaning that it also produces more CO2 emissions than any other phase. In fact, it’s estimated that the steps in the last mile account for up to half of all delivery vehicle CO2 emissions. Today’s customers are more environmentally conscious than ever, and that puts extra strain on companies to make their delivery process as efficient and sustainable as possible.
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Innovations in last mile delivery
Last mile delivery may present a lot of challenges, but challenges are what drive innovation. In recent years, there have been numerous innovations in the logistics industry designed to make final mile delivery more affordable, transparent, and sustainable.
Here are some of the top innovations poised to make an impact on last mile delivery now and in the future:
Digital technology
Digital logistics tools are making last mile delivery a lot more transparent for companies and their customers alike. Things like GPS tracking and real-time updates ensure all parties know where the shipment is located at all times. Improvements in route optimization software, meanwhile, are allowing companies to develop more efficient routes. This innovation is ultimately leading to fewer delivery vehicles on the road, which improves everything from costs to sustainability to traffic congestion.
Crowdsourced delivery models
The sharing economy has made a mark on a number of industries, and it’s starting to play a role in the logistics industry as well. With crowdsourced delivery, last mile carriers can use technology to assign delivery requests to nearby drivers. It’s a lot like how restaurants use services such as Doordash and Uber Eats to deliver food, except, in this case, it’s all types of orders being delivered. Crowdsourced delivery offers many benefits, from reduced costs to enhanced flexibility and scalability, and it’s playing a significant role in how companies elevate the delivery experience.
AI-powered demand forecasting
One of the key challenges in logistics is predicting demand so that you can anticipate delivery volumes and allocate resources effectively. With AI-powered demand forecasting, though, companies can better predict spikes in delivery volumes. This helps them optimize all areas of their supply chains, including last mile delivery.
The value of partnering with an on-demand carrier
Last mile delivery is both incredibly important and incredibly challenging. Even with recent innovations, this phase of the delivery process remains complex and costly for many businesses. For this reason, many companies choose to partner with an on-demand carrier like Bungii to meet rising final mile delivery demands.
On-demand carriers bring a lot to the table when it comes to delivery optimization. When you work with a trusted and reliable carrier like Bungii, you can look forward to benefits such as:
- Increased flexibility: Partnering with an on-demand carrier gives you access to a network of drivers and vehicles that can be easily scaled up or down based on demand. This affords you a lot more flexibility to meet demand while also eliminating the need to manage an in-house fleet.
- Faster delivery times: The top on-demand carriers make speed a priority and use a lot of tools and optimized processes to ensure that shipments are delivered as fast as possible. At a time when customer expectations for shipping are on the rise, this can be a key differentiator for your brand.
- Cost savings: On-demand carriers operate on the economy of scale and have fine-tuned their processes for maximum cost efficiency. This means that, for many companies, outsourcing last mile delivery to an on-demand carrier is much more affordable than using your own fleet.
- Real-time tracking: Many on-demand carriers offer advanced tracking systems that provide real-time updates on a shipment’s status and location. This increases delivery transparency for both your company and your customers.
Thanks to these benefits and more, partnering with an on-demand carrier such as Bungii is a great way for many companies to solve last mile delivery challenges and ensure an excellent customer experience.
Conclusion
It’s fair to say that last mile delivery is both the most complex and most important (at least when it comes to meeting customer expectations) of the shipping process. If you would like to make delivery more affordable, efficient, and transparent for your company, Bungii can help. Contact us today to learn more about our industry-leading logistics services.
