The challenges of last mile delivery logistics and the tech solutions cutting costs in the final mile
As consumers increasingly turn to ecommerce for all their shopping needs, speedy fulfillment and distribution isn’t just a “nice to have”—it’s the expectation of every online shopping experience. And if logistics companies and their retail partners want a shot at thwarting the ever-looming threat of Amazon Prime, it needs to be a priority.
As a result, businesses have begun racing to develop new technologies and experimental supply chain models to increase parcel volume, expedite deliveries, and delight customers — all while trying to cut costs. Unfortunately, one of their biggest expenses and challenges is same-day, final mile delivery.
What is last mile delivery?
In a product’s journey from warehouse shelf, to the back of a truck, to a customer doorstep, the “last mile” of delivery is the final step of the process — the point at which the package finally arrives at the buyer’s door. In addition to being a key to customer satisfaction, last mile delivery is both the most expensive and time-consuming part of the shipping process.
What is the last mile problem?
In rural areas, delivery points along a particular route could be several miles apart, with only one or two packages getting dropped off at each one. In cities, the outlook isn’t much better; what urban areas make up for in stop proximity is quickly negated by the near constant delays of traffic congestion.
What are the costs of last mile delivery?
As a share of the total cost of shipping, last mile delivery costs are substantial—comprising 53% overall. And with the growing ubiquitousness of “free shipping,” customers are less willing to foot a delivery fee, forcing retailers and logistics partners to shoulder the cost. As such, it’s become the first place they’re looking to implement new technologies and drive process improvements.
Technology solutions to improve last mile logistics
With crowdsource technology, retailers, logistics partners, and consumers can connect directly with local, non-professional couriers who use their own transportation to make deliveries. Companies can get their online orders to customers faster, and customers can get their items when and where they want them. The freedom to make on-demand and scheduled deliveries also ensures that customers are home at the time of delivery—eliminating the need for a second (or third) attempt.
And with the ongoing integration and enhancement of automation across industries, it’s likely we’ll start seeing delivery robots, drones, and self-driving vehicles making many of these drop-offs in the not-so-far future.
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