What is Last-Mile Delivery?
Every stage of the logistics activities is considered crucial as it facilitates the relationships between production and the movement of products. Last-mile delivery is the final step of the logistics process that refers to the movement of goods from a transportation hub to the final delivery destination. Optimizing and solidifying your last-mile logistics operations can take your business to the next leap.
In the world of supply chain and logistics, last-mile operations are the cornerstone to driving growth and profitability to all the businesses that deliver products directly to consumers. According to the recent study conducted by economic times, “India’s last mile delivery market is set to touch a market size of $6-7 billion by 2024”. Therefore, ensuring that all customer-facing processes – within the delivery process should run smoothly.
Axestrack believes in a customer-centric logistics strategy that can help businesses to achieve high levels of delivery efficiency by optimising their last-mile operations. The businesses include food delivery companies, third-party logistics companies, eCommerce, pharmacies, and so on. Last-mile delivery in logistics is one of the most expensive and time-consuming parts of the shipping process that needs to be done fast and efficiently.
Challenges of Last-Mile Delivery in Logistics
In the contemporary world, many logistics providers are struggling to optimize last-mile logistics. Implementing innovative business models is important that tend to address the customer demand and focus on speedy and timely delivery. The costs and inefficiencies of the last mile problem can lead to unhappy customers and many other real business challenges. Last-mile delivery poses several new challenges that need to be addressed. Some of them are:
Inefficient routing
An inefficient route planning can impact not only cost but has a direct influence on ETAs (estimated time of arrival). Optimization of the routes plays an important role in cutting down the overall costs by analyzing fuel efficiency, traffic conditions, environmental regulations, and so on. It is imperative to choose the right route optimization software that can provide the right ETA to the customer.
Higher cost of last-mile deliveries
The organization’s entire shipping cost has increased due to the new and higher customer standards. The increasing cost of last-mile logistics is challenging for most enterprises and the issue can be resolved with higher efficiency and better planning. The major factors that can add to the total cost of the last-mile delivery incorporate penalties caused by delayed deliveries, inefficient route planning, delivery equipment cost, reverse logistics costs, etc.
Transparency
Lack of transparency in the operations can lead to failed deliveries. Gaining absolute real-time visibility is the key element of any business as it directly impacts the delivery profitability. With Axestrack’s fleet management software the consumer can have complete transparency and real-time updates about the movement of their shipment. Moreover, deciding the routes manually leaves ample scope for human error. Therefore last-mile delivery tracking is useful to achieve the goal of improving brand loyalty and customer satisfaction.
Delayed delivery
One of the biggest challenges faced by logistics companies is adherence to timelines. Delayed deliveries can lead to a negative brand reputation and can also add up to the overall logistics cost. Flexibility and agility are needed in the delivery management process to fulfill the timelines and avoid the delays resulting from supply chain processes.
Solutions to Improve Last-Mile Delivery Logistics
Centralize all Logistics Data
Comprehending information and data that gives you the most complete picture of last-mile delivery is essential for your business. Operating the data from one central location can improve your overall logistics and supply chain business. Analyzing the routes, schedules, and dispatching can help you to lower the costs of the last mile. Enterprises can ensure that the information is accessible only to the right person, at the right time by analyzing the data. Moreover, data-driven decisions can reduce delivery times and mistakes.
Route Management Software
Automating route planning will help you track each vehicle’s location using hardware units and also eliminate human errors. Manual route planning tends to negatively impact ETA and route efficiency. Choosing the right route management software is extremely important to improve last-mile delivery operations and scale your business in the future. Removing any speed bumps along the way tends to improve fuel efficiency and increase the number of customers you can serve. Also, having drivers spend less time in traffic can help them to plan out their activities precisely for the entire shift.
Establish Standard Operating Procedures
Historic data and reports help you to determine and establish better procedures in your business. In-depth data analysis of your business’s current size and operations is useful in optimizing and measuring future last-mile deliveries. Also examining the previous last mile operations such as service times, load times, and so on is necessary to create optimal performance benchmarks.
Provide Real-Time Visibility
Customers should be able to inspect the exact location of the vehicle and not just a static tracking number. Therefore, last-mile delivery tracking could lead to happier customers. Having visibility on shipments, drivers, and delivery vehicles helps you to identify the problems immediately and to resolve them proactively. Scanning items once they enter a truck can help fleet managers to keep track of the products till their end-point. Also monitoring your driver’s activities in real-time can have a significant positive impact on their productivity.
Leverage Modern Technology
Investing in predictive analytics and the Internet of Things (IoT) can boost the last-mile delivery services. Logistics companies can get insights into every stage in the supply chain and customers how they are likely to order. It will also help them to allocate logistics resources. Harnessing the power of modern technologies to get in-depth reports and a summary of all distribution processes. Technology that fits your business needs enables you to streamline, manage, measure, and improve last-mile delivery performance.
Using Last-Mile Logistics to Stay Ahead of the Curve
We have covered what last-mile logistics is and understood that it is the key to customer satisfaction. Scrutinizing the challenges and improving your last-mile logistics can help you create an edge over your competitors. Undoubtedly, last-mile logistics plays a considerable role in maintaining customer loyalty. Offering a higher level of customer service by providing them real-time insights tends to give customers a feeling of empowerment.
Furthermore, providing real-time visibility, investing in modern technologies, and communicating regularly with drivers are the most efficient strategies that will allow the companies to meet customers’ demands. To sum up, to keep delivery management simple, productive, and seamless the business needs to enhance end-to-end logistics operations in the supply chain.
Frequently Asked Questions
How much does the last-mile cost?
Last-mile delivery cost is considered to be one of the most expensive elements in the overall shipping process. The costs account for about 40-50% of the entire supply chain. The operations where the true cost lies when it comes to last-mile delivery are - Labour, Packaging, Fuel, Software, etc. Improving the speed and efficiency of last-mile delivery can reduce costs and enhance overall customer satisfaction.
What is the last mile in the supply chain?
In the supply chain process, the term “last mile” refers to the movement of goods and products from a transportation hub delivered to the end-users. It is the last stage of the transportation process. This is the crucial step of the logistics process that is driven by the continuously evolving market trends and demands to improve overall customer experience.
What is the last-mile delivery problem?
Last-mile delivery is known to be the most challenging, time-consuming, and expensive part of the entire delivery process. Key problems that make last mile delivery challenging are lack of transparency, late deliveries, outdated technology, inefficient route planning, poor granular data tracking, etc. With the implementation of new-age technologies in the logistics sector these challenges can be addressed by businesses.
Why is last-mile delivery important?
The continual growth and development of the supply chain processes are gaining a lot of popularity to meet the growing demands of the customers. Last-mile delivery plays an important role in determining the customer experience outcome. Streamlining and scaling the delivery operations according to the customer demand is the key to improving overall supply chain management effectiveness.
