Over the years, consumer behaviour has changed. More people have developed a preference for online shopping, more so because of the convenience it offers. With it comes the challenge of last-mile shipping, where customers expect it to be free and fast. In order to stay competitive, your company has come up with ways to improve efficiency and cut costs in order to fund your shipping logistics.
In this guide, we look at the different ways your organisation can use to make your last mile shipping more successful and affordable to your customers.
What is Last Mile Delivery?
Last mile delivery refers to the last step of the delivery process where the package is moved from the transportation hub to the final destination, often a personal residence or retail store.
This is the most crucial step in the delivery process, and businesses aim to ensure it is as quick and efficient as possible to meet the continually increasing consumer demand for speedy shipping, particularly in e-commerce, food, and retail industries. The last mile delivery also happens to be the most expensive leg of the journey.
Important Steps in the Last Mile Delivery Process
1. Entering orders into a centralised system
Orders and requests are monitored by the sender and the end recipient, who will follow the status of the delivery through the tracking number.
2. Arrival at the transportation hub
The last mile process truly begins after the order arrives at the transportation hub and begins its delivery to the end recipient. Businesses need to ensure the orders get from the transportation hub to the customer within the shortest time possible.
3. Designation to delivery personnel
The orders are strategically sorted and designated to different delivery personnel. This is essential to having an optimised cost-effective delivery last mile logistics solution.
4. Scanning of orders
The orders are scanned and loaded into delivery trucks. This updates the status of the order for the sender as well as the end recipient for tracking purposes. This step also helps reduce the risk of packaged goods getting lost along the way.
5. Proof of delivery is obtained
At this point, the parcel has arrived at its final destination. The delivery personnel then updates the tracking information accordingly to verify and confirm that the process has been completed.
Last Mile Challenges
There’s no question that an efficient last mile delivery process is essential to keeping your customers happy.
However, while customers want shipping that is fast and free, this also happens to be the most expensive and time-consuming part of the shipping process, contributing substantially to overheads, which presents companies with the last mile delivery problem.
Figures show that last mile shipping can account for up to 53% of the shipment’s total costs. Companies have to foot about 25% of that cost themselves. But this number is increasing as supply chain inefficiencies are becoming more and more costly.
Optimising last mile delivery means substantial savings for ecommerce businesses and retailers, especially as the number of shipments across most industries continues to skyrocket.
How Technology Can Solve the Biggest Last Mile Delivery Problems
Use route planning
Each driver has a specific route they need to follow when dropping packages. Ideally, these routes should be straightforward and effortless. But it doesn’t always happen that way. Some routes are several miles long with only a handful of drop-off points, especially around rural areas. That means a lot of input goes into time and effort for the deliveries.
In urban areas, traffic congestion is a significant concern that can lead to drivers using more time and fuel, even when drop-offs are closer.
You can use technology to recommend efficient routes and provide updates on traffic that could affect these routes. The drivers can receive messages in real time, ensuring that end users have real-time information and optimising route times.
Reduce service time and labour costs with auto-dispatching
Having software that plans your routes will save time and decrease the number of drivers needed in a day to complete the deliveries, helping cut back on labour and the associated costs.
Managers can set auto-assignment rules based on driver location and route distance while limiting the number of tasks per driver.
Some options also have a dispatch feature that adds a new level of automation, helps save time, enables efficient resource use, and allows managers to spend time optimising other areas of the delivery process.
The additional level of automation not only simplifies last mile logistics but also helps to reduce inefficiencies that can drive up costs.
Use reporting to increase accountability
Reporting is an important feature that can help you identify bottlenecks and weaknesses before they become a bigger problem for your company, and also helps you identify opportunities for improvement.
Reporting technology can help you monitor key metrics, including success rates, on-time rates, service times, and feedback scores, among others. You can then filter this data by teams, drivers, weeks, days, or hours to make it easily digestible and actionable.
Improve customer experience
Any meaningful improvements you make help to improve your customer communications and require going beyond simply providing customers with a static tracking number. Customers are increasingly expecting more from standard delivery services to be satisfied, hence the need to continually improve the customer experience.
Last Mile Delivery Trends
Rapid order fulfilment
An increasing number of consumers now expect on-demand or same-day delivery meaning there’s more emphasis than ever on logistics and fulfilment.
As a result, businesses now need to fulfil orders within a shorter time to keep up with the consumer demand and changing tides.
Improved traceability
Traditionally, last mile deliveries were a little different and lacked features like proof of delivery and tracking information. This is an important part of ensuring packages don’t get lost, and if they do, it’s easier to figure out where and when they got lost.
With features like proof of delivery, you also get vital data that reduces disputes between carriers and customers because the package is signed for, or where and when the package was left if no one is home.
In-house delivery services
More and more companies are adopting in-house delivery services, which involve operating their own fleet of vehicles and employing salaried drivers to transport shipments from their warehouses to customers. This allows companies to control costs, enhance customer experience, and expand their delivery window.
In-house delivery means a company has its own fleet of delivery vehicles and salaried drivers to get shipments from its warehouses out to customers.
Micro warehousing
There is a trend where more organisations are allocating or purchasing additional warehouse space dedicated to ensuring extra-fast deliveries.
Conclusion
There is still a long way that companies have to go as far as last mile delivery is concerned. There are challenges and costs associated with the process, but working to optimise this process can help to get your company more aligned with the ongoing trends in the industry, which are designed to make delivery times shorter.
