The chances are, if you’ve been in the transportation industry for a while, you’ve heard the phrase “last mile delivery,” also called “final mile delivery.”
In recent years, with the rise of e-commerce and a consumer-driven industry, last mile delivery has become a major differentiating factor among competitors, and a job opportunity for 1099 independent contractors looking to have a regular route close to home.
With today’s consumers expecting fast and reliable delivery every time they make an online purchase, retailers and last mile delivery companies have had to work hard to offer multiple options for fast and affordable shipping and delivery rates. However, between a fluctuating economy and the unsolved “last mile problem,” there is still room for improvement in this key stage of the supply chain process.
Read on to find out what last mile delivery really is, the current difficulties facing the transportation industry, and how new technologies are helping businesses nationwide combat the “last mile problem.”
What is Last Mile Delivery?
The supply chain process can be divided into three main stages:
The First Mile is the creation and distribution of a product from the original manufacturer.
The Middle Mile is the long distance transportation of a product from the manufacturer to its final transportation hub.
The Last Mile or Final Mile is the transportation of a product from a hub such as a local warehouse or fulfillment center to its final destination at either a retailer or customer’s home.
Every step of the supply chain process is important, but the last mile has the most impact on the customer’s experience, and their likelihood of ordering from a company again. Therefore, businesses must ensure the most quick and efficient last mile delivery as possible if they want to stay ahead of competition.
What’s the “Last Mile Problem?”
The “last mile problem” is another phrase you might have heard thrown around. This simply refers to the common factors that cause issues, delays, and additional expenses during the last mile delivery. This stage of the supply chain process might be the most critical to the consumer experience, but it’s also the most expensive and time-consuming for the business, often accounting for 53% of overall delivery costs.
Many factors play a role in this notoriously difficult and expensive phase of the delivery process that affect both drivers and businesses. For drivers, last mile delivery can be difficult due to a short delivery time frame, dense urban areas that lead to more stops, last minute route changes, rising fuel prices, and failed deliveries.
Businesses must also account for other factors such as the added pressure of customer expectation for rapid delivery and real-time tracking, the shortage of qualified drivers, and the costs of vehicle maintenance.
The importance of last mile delivery is certain to continue increasing, which means that it’s essential to utilize the newest technologies and industry trends to find solutions to the “last mile delivery problem.”
How to Prepare for the Last Mile
There are several important considerations to keep in mind when attempting to optimize your last mile delivery process.
Efficient Route Planning
Effective last mile delivery requires efficient route planning to minimize travel time and fuel costs. Utilize advanced route optimization software to streamline routes and improve overall efficiency. Hiring or contracting with 1099 independent local drivers or owner operators can be an added bonus, as they will be more familiar with shortcuts and traffic patterns.
Real-Time Tracking and Visibility
One study recently reported that 93% of customers expect to be able to track their order. By employing technology solutions that provide real-time tracking and visibility into the delivery process, you can assist in monitoring driver performance, ensuring on-time deliveries, and addressing any unforeseen challenges.
Technology Integration
The companies that have best set themselves up for success in the last mile delivery process, such as Amazon, FedEx, and General Logistics, have all integrated technology to improve efficiency and lessen the chance of error. Consider technologies such as mobile apps, GPS tracking, and electronic proof of delivery (ePOD) systems to streamline operations and provide better service.
Fleet Management
The best way to avoid costly repairs and delays is by keeping your fleet upgraded and compliant with regulations. Many providers of last mile delivery also utilize electric vehicles due to their lower operating and maintenance costs and reduced carbon footprint. It’s also worth considering offering additional benefits for the customer, such as white glove service, that cater to businesses and individuals who are seeking a higher standard of care, attention, and service for their shipments.
Although facing a number of difficulties and considerations as it expands, last mile delivery is sure to be a key part of the future of the trucking industry.
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