With the increase of consumers using ecommerce shopping for all their needs, fast and convenient has become something that is not just nice to have, but a necessity. Especially if a retailed wants to have a horse in the race against the popular Amazon Prime, they need this type of service
Because of this, businesses have been developing new technologies and models to increase parcel volume, have faster shipping, and surprise and delight their customers.
The biggest challenge and expense in this process comes from last-mile shipping.
What is last-mile delivery
Last-mile delivery is the moving of product from a transportation hub to its final destination, which is more often than not, a personal residence.
It is meant to deliver items to the customer as fast as possible while also minimizing the costs as much as possible.
With online orders being more popular than ever, last-mile delivery is now becoming something to pay more attention to, as this can be a key differentiator for retailers. Consumers are able to easily shop for product alternatives and choose different options if retailers don’t meet their needs. This is why it is so important for retailers and supply chains to have exceptional service and build their market share.
Challenges in last-mile delivery
Have you ever tracked a package online and saw that it was in the delivery process for what felt like a decade? Then you understand that the problem with last-mile delivery is inefficiency. This is because the final leg of the order fulfillment will usually involve multiple stops that have lower drop sizes.
The time it takes to complete this process can depend on multiple factors including the following:
- The size of the company or logistics provider
- The number of orders picked and packaged daily
- The frequency orders are picked up by a carrier
- The space between delivery points and the distribution center
- If the distribution center is in a rural or urban location
- How many deliveries are made en-route of the delivery
You can see that there are many challenges outside of the company’s control that come along with last-mile delivery. All of which affect the process in their own way.
The challenges that come with last-mile delivery are only getting worse, as ecommerce continues to become more and more popular in the United States.
Retailers and logistics partners are also facing another challenge with the growing rate of free shipping. Customers are becoming less willing to take on the delivery costs causing them to fall onto the retailers and logistics partners to take on the payments of these costs.
Solutions for last-mile logistics
Crowdsourcing Fulfillment Delivery
With the problems of logistics being pretty clear, one would have to assume someone has started thinking of some solutions.
One solution that they have decided to try is crowdsourcing.
This model has become more popular as of late. We are seeing it in the transportation industry in the form of Uber and Lyft. It has been taking over the hospitality service industry with Airbnb running hotels out of business. It has also become a staple for convenience in food delivery services.
Retailers are becoming very intrigued by its low cost and the way it has improved customer experience.
By crowdsourcing, retailers and logistics partners are able to work directly with locals who are using their own transportation to make deliveries. Companies are now able to get orders delivered to their customers at a much faster rate than ever before and keep their customers happy.
Another exciting option to improve last-mile delivery is housing inventory closer to its final destination and covering regions across the US instead of centralized in a single warehouse. With inventory spread to multiple smaller warehouses that cover different regions, it can take travel time away from the distribution centers in the challenges listed above, which will lower the distance covered during the last-mile delivery stage. This can improve the fulfillment time while also reducing carrier costs that travel longer distances.
One great way to go about distributing inventory is partnering with a third-party logistics (3PL) warehouse, like the ones shown in the fulfillment marketplace. The prevetted 3PLs in the marketplace cover a wide range of markets across the United States and Canada, allowing ecommerce brands and retailers to shorten the distance covered during fulfillment and during last-mile delivery.
Last-Mile Delivery Conclusion
It is cool to think about the progression in technologies and automation, to the point where we are seeing delivery robots and drones. It won’t be much longer before we have self-driving cars making deliveries eliminating one more cost.
There are exciting things taking place in last-mile delivery. There are new levels of technology taking place that can make a large impact and help businesses reduce both time and cost when it comes to shipping.
It is important to take note of these changes and find out how your business can save money and improve customer satisfaction.
With so much competition out there, it is important that you take full advantage of these opportunities and grow your business to its full potential.