In 2020, the ever-complicated last mile delivery got more chaotic owing to the ongoing pandemic. At a time when businesses were struggling to cope up with the changing customer needs like faster and same-day delivery, in came challenges like contactless delivery, zero cash payments, health updates and more. Savvy customers want end-to-end transparency of fulfilment progress. They want to know where their order is, who is bringing it and when they will receive it. It does not stop there; customers want brands to ensure flexible delivery. Modern consumers are more loyal to brands that ensure a flexible online buying experience and make allowances for customer convenience.
To deliver on these expectations, supply chain leaders need to revisit their last mile strategy. Conventional hub and spoke logistics models will not be enough to balance customer experience and profitability. Digitalization of core last mile processes will be key in shaping the future of retailers, eCommerce providers, grocery chains, restaurants and manufacturing companies.
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To better understand last-mile delivery lets's quickly glacle through the significance of first and mid-mile delivery.
First-mile delivery can be defined as the transportation of goods from a merchant’s premises or warehouse to the next hub from where the goods are forwarded further. First-mile delivery means different things for different businesses. For instance, in the case of retailers, first-mile means shipping goods from local distribution centres to stores. In the case of manufacturers, it means transportation of finished goods from a plant or a factory to a distribution centre.
Movers and packers consider the first-mile as the process by which they pick up goods from the end-customer’s home or store and then move it to a warehouse or storage location. In case of eCommerce companies first-mile defines the process where goods are picked up from a retailer and then transferred to third-party logistics providers or courier service providers to be delivered to the end-consumer.
Businesses over the years have understood the significance of last-mile delivery with regards to providing a delightful customer experience. This has resulted in a situation where the first-mile has been conveniently ignored, mainly because this process has fewer stakeholders and it is not end-customer facing. Now with the need to provide customers with end-to-end transparency of delivery progress and optimize logistics costs, equal focus should be given to first-mile operations. This triggers the need for enterprises to embrace robust first-mile tracking tools that optimize first-mile costs and ensures end-to-end visibility of delivery operations.
A small but extremely important part of first-mile delivery is labelling. Even now a large number of businesses manually label packages. This leads to a situation where not all required fields are mentioned in packages making dispatching inefficient and prone to delays. Automating dispatching, a key feature of a final-mile tracking platform, quickly addresses this challenge.
In the race to deliver fast, packaging often gets impacted. Businesses tend to use uniform packaging materials irrespective of the type of item a package carries. This causes material damages in the first-mile itself and thereby delaying the entire freight forwarding process. Hence, leveraging advanced delivery tools that empower businesses to gain better control of material handling is important.
Poor visibility of first-mile delivery operations is a key challenge that ultimately impacts not just mid-mile but also last-mile processes along with the end-customer’s delivery experience. Inefficient tracking of movement of freight from a warehouse to a hub, poor handling, en route delays among others are key impact areas of poor visibility.
When it comes to addressing these critical first-mile challenges a first-mile tracking solution or platform can make a winning difference. Let's quickly glance through some of the key benefits of a first-mile tracking solution.
A first-mile tracking platform ensures end-to-end visibility of delivery progress right from a parcel’s movement for a warehouse to a hub where it’s forwarded further to mid and final-mile processes. Businesses can track where a parcel is anywhere and anytime in its first-mile journey. Owing to greater visibility delivery stakeholders can accurately benchmark first-mile performance, eliminate unnecessary delays and improve accountability of carriers and shippers.
First-mile tracking significantly reduces costs by optimizing delivery routes, mitigating damages, reducing fuel consumption, improving delivery productivity and more.
Ensuring efficient first-mile tracking empowers businesses to make the process of forwarding freight fast and this, in turn, drives on-time fulfilment or delivery. It also keeps the customers informed about the movement of her package once it leaves a warehouse.
First-mile delivery is defined as the movement of goods from a retailer's or manufacturer's warehouse to a hub from where a logistics partner, carrier or shipping company takes the goods forward.
Last-mile delivery is defined as the movement of goods from a hub to a customer's doorstep.
The growing complexities of first and last mile delivery often take away the focus from middle mile delivery operations. Middle mile delivery or middle mile logistics can be defined as the shipment of goods and parcels from a warehouse or distribution centre to traditional stores, brick and mortar retail outlets and facilities. In other words, middle mile transportation precedes last mile delivery operations.
Savvy retailers who own both the ends of middle mile delivery, that is warehouse and brick and mortar selling facilities, are realizing that the routes connecting these points remain mostly unaltered. Citing this as an opportunity to automate repetitive manual milk runs, they are deploying unmanned vehicles to transport goods between these locations to drastically reduce operational costs.
Now that we have established the importance of first and and middle-mile delivery, let us take a close look at all aspects of last mile delivery operations. Get to the part that you are most curious about. Here is a table of content.
Last mile delivery refers to the last leg of supply chain operations. A product’s journey from a warehouse to the doorstep of the end-customer is termed as the last mile delivery.
Last mile delivery solutions empower retailers, eCommerce providers, 3PLs, and manufacturers among many others, to orchestrate, optimize and enhance end-to-end logistics operations. Let’s quickly glance through some of the key features of a last mile delivery solution.
The best last mile delivery solution ensures fast deliveries, better margins and delightful delivery experiences savvy businesses are leveraging modern dynamic routing tools. Dynamic routing enables last mile delivery and logistics managers to track their delivery executives and fleet in real-time. It immediately triggers alerts via instant notifications in case there are unnecessary diversions, prolonged stoppages and vehicle idling. It optimizes delivery routes in real-time based on traffic congestion, weather conditions, one-way windows, delivery urgency and more. Dynamic routing also makes route planning easy. Based on route productivity and fuel consumption it automatically generates the most efficient route to reach a customer’s location and simplify last mile delivery.
Visibility of ground-level delivery operations makes or breaks the last mile. Modern last mile delivery solutions help businesses to gain 100% visibility of logistics operations right from the time a customer places an order. Delivery managers can track ground-level delivery activities in real-time and quickly address inconsistencies as and when needed.
Modern last mile solutions or advanced logistics solutions are powered by electronic proof of delivery that allows businesses to empower customers to sign receipts using mobile applications. This is critical now as leveraging ePoD, both customers and field executives can adhere to social distancing norms by eliminating physical contact. It also helps efficiently archive data, analyze customer feedback, makes audit processes easier and reduce manual errors.
Leveraging a modern logistics platform built by savvy last mile solution providers helps businesses accurately benchmark KPIs and improve SLA adherence. It provides logistics stakeholders with a single pane of glass to view critical delivery benchmarks like performance of delivery executives, delayed deliveries, customer ratings, ETA adherence, pending deliveries, 3PL performance and more.
Rigid logistics processes are major roadblocks when it comes to ensuring wonderful customer experiences. Last mile delivery tracking solution provides customers with a self-service delivery model. It empowers them to change location and time on the go based on their convenience. Such a solution can accommodate such changes quickly by updating workflows based on customer needs.
With the growing demand for home deliveries, it’s becoming difficult for businesses to cost effectively scale delivery operations with their existing resources. An advanced last mile logistics solution that is powered by crowdsourcing tools, empowers businesses across industries to effectively scale delivery operations. It can quickly onboard temporary or part-time delivery executives by scanning the gig-economy. It onboards such executives based on costs, productivity, delivery urgency, proximity and more.
Once a customer places an order online her web browser or mobile application directly communicates with the retailer or eCommerce provider's server. The order is sent to a centralized order management system confirms stock availability and provides the customer with an option to pay online. It then sends a request to the warehouse hosting the stock to dispatch the products to the end customer. It is here when the last mile mainly commences. The shipper sends an agent to pick up the customer's item from the warehouse.
The agent then loads the parcel in his vehicle and delivers it to a predetermined hub. Then from the hub a delivery agent picks up the parcel and delivers it to the customer's doorstep. All these might appear to be simple but in reality it is not. There are multiple moving parts in the last mile ecosystem and the quality of last mile execution depends a lot on internal and external factors. To ensure a seamless execution of all these disparate processes, businesses are embracing modern last mile delivery logistics solutions.
In simpler terms here are 6 key steps involved in the entire last mile process.
There are a plethora of challenges that weigh down overall supply chain and last mile operations. The rapidly growing need to drive same-day delivery, legacy IT architecture, poor logistics visibility and, COVID-19 regulations and more pose serious problems when executing last mile operations. Let’s quickly glance through these last mile delivery challenges.
According to research, more than 80% of customers today are willing to pay more for faster delivery. The challenge is it's not easy to deliver so fast. Inefficient routing practices, manual dependencies with regards to allocating tasks and poor management of third-party logistics providers make it extremely difficult to shrink delivery turn-around-time. Another challenge here is ensuring optimum utilization of vehicle capacity. Since same-day delivery mostly includes small packages, the chances of fully utilizing vehicle capacity become a problem. Businesses do not have the luxury of time to wait for sufficient orders to be placed so as to ensure 100% capacity utilization. This poses financial challenges too.
Without having highly efficient routing tools and strategies it is difficult if not impossible to ensure timely and cost-effective execution of last mile delivery service. Traditional routing models are highly dependent on manual processes making it challenging to consider all the factors that influence chalking out highly productive routes. For instance, with manual routing processes in place, it's a mammoth problem to change a delivery route based on real-time factors like weather, traffic congestions, sudden road closures, accidental diversions and more.
Legacy supply chain architecture and traditional delivery processes with poor system interoperability are major reasons behind poor visibility of logistics operations. Take this case in point. If an order management system is not in sync with a 3PL provider's system, it will be very difficult for a logistics manager to track and trace the exact location of a delivery vehicle at any given point in time. This triggers a plethora of inefficiencies. Poor visibility results in delays, inaccurate ETAs, route diversions, vehicle idling, extra fuel consumption and makes deliveries opaque to customers.
The ongoing COVID-19 pandemic disrupted existing logistics models. Social distancing regulations have changed the way parcels are picked up, delivered and received. Contactless delivery has become an elementary expectation and why not, it ensures greater adherence to social distancing compliance. Well, contactless deliveries might come across as a simple process where an executive just keeps an item outside a customer’s doorstep, but actually, it's not. Businesses need to ensure customers know about delivery completion without having to open the door. Eliminating cash and card payments is also necessary to ensure zero-contact. Also, brands need to inform customers about the latest body temperature of a delivery personnel and store staff along with a timestamp to ensure high levels of safety standards.
With the increasing volumes of online buying and the pressure to shrink delivery time, businesses are revisiting how they execute last mile operations. Many businesses are struggling to find delivery executives during peak business days when their own resources are exhausted. This makes committing to same-day deliveries difficult.
In a world driven by instant gratification and constantly changing market dynamics, there is little place for rigid delivery processes. Traditional last mile processes that are dependent on manual intervention fail to deliver in customer expectations. For instance, modern customers would prefer brands that allow them to change delivery location and time on the fly based on their convenience.
Unfortunately, transportation accounts for more than 20% of the world’s carbon emissions. As environmentalism goes mainstream, more consumers are willing to pay extra for products that are organic in nature and packaged using recyclable materials. It will not be surprising to witness customers demanding carbon-neutral deliveries. According to research, 48% of consumers are in favour of their delivery to be carbon-neutral. Therefore businesses need to implement strategies that reduce fuel consumption and miles travelled in the last mile.
There are multiple reasons why last mile delivery is important. Today, logistics is actually the only touchpoint between a customer and a brand, hence making the last mile extremely critical. Last mile delivery impacts customer experience, delivery profitability,
Tracking all the moving parts in the last mile ecosystem is critical. Modern logistics platforms ensure that logistics stakeholders have greater control of ground-level activities . Some key benefits of shipping tracking are eliminating unnecessary delays, mitigating transportation risks, KPI accuracy, better productivity, and cost optimization. By ensuring robust end-to-end package tracking and post tracking, businesses can drastically reduce turn-around-time.
Here are seven immediate benefits of implementing a robust last mile delivery solution.
The last-mile has evolved over quickly in the last few years, especially in 2020; but then again, evolution is a continuous process. Here are some trends that organizations have chalked to make the best of their last mile logistics operations and to achieve the ultimate goal of customer satisfaction. These trends (along with others that evolve) will play an important role when it comes to planning and improving last mile logistics.
We live in a world of instant gratification. If you want to speak to your friend even countries apart, it can be achieved at the tips of your finger. Hence, consumer behaviour, as a whole, has become rather impatient and everybody wants to have their orders delivered as soon as possible; in some cases the same day.
In order to stay ahead of the curve, even the last-mile carriers need to fulfil this expectation. This entire turn-around process of fulfilment becomes very easy and rapid with the implementation of technology.
Tracking and traceability have become essential elements that assure a package is properly counted for. This is rather important because it avoids potential confusion around a lost package. Live-tracking through GPS further adds to the feasibility of monitoring the real-time location of a package and a fleet driver; all of it contributing to increased awareness on the carrier as well as the user end. Other similar additional features such as proof of delivery and tracking information helps reduce the potential disputes that can otherwise take place between a consumer and a shipper.
A lot of medium and big players in the e-commerce industry have now shifted to an in-house delivery system. The biggest, obvious example here is Amazon. With in-house systems and resources, the retailer doesn’t have to depend on a third-party carrier to be able to effectively ship the product packages; they do it on their own. The company essentially builds its own fleet and hires drivers on their own payroll. This primarily reduces dependencies and cuts down a lot of costs. Their in-house resources are also reliant on the use of technology which might come across as a big first-time cost, but it is worth the money saved due to it in the long run.
Renting additional spaces and converting them into your company’s warehouse can further help in ensuring seamless order fulfillment. This is simply because, with more volume of orders, one obviously will need more space to be able to fulfill the increased orders. With more establishments dedicated to fulfilling orders, one can also segregate them on the basis of the kind of delivery they’d be used for. For example, one-day and no-rush delivery warehouses.
Last mile delivery and logistics solutions can be of immense aid with regards to enabling future-ready and disruptive delivery technology. Savvy businesses have already started experimenting with autonomous vehicles by delivering food within a college campus. Then pizza makers are leveraging drone technology to deliver food to customers via their balcony and windows. It will not take too long for robot tests to be launched soon either.
As we have already established, human intervention is one of the biggest facets that cause delays in deliveries and makes the process complicated. You cannot control issues like unavailability of delivery personnel or their inability to work a particular shift, autonomous cars can mitigate the intensity of these problems. Besides, human involvement also means a lot of labor costs in the form of salaries. With the advent of robots and drones, that aspect will be easier to handle too.
Thanks to rapid advancement in logistics technologies the complexities involved in executing the last leg delivery can be easily addressed. Modern last mile software is powered by disruptive technologies like machine learning, the Internet of Things, business analytics, natural language processing, automation and more that makes last lime delivery management simple, productive and seamless. Let's take a quick look at some of the key features of advanced last mile delivery management software.
A modern last mile delivery platform analyzes historical data to automatically identify and generate the most efficient route within a particular geofence parameter of a cluster. This is loop optimization. It's one of the most effective ways businesses can leverage the power of self-learning algorithms to enhance routing, boost driver productivity, optimize the number of deliveries per journey and ensures larger volumes of on-time deliveries.
Poor visibility remains a major challenge when it comes to executing delivery operations. A last mile platform software allows businesses to gain complete visibility of on-ground delivery operations. Real-time tracking and tracing help businesses know where exactly a vehicle/driver is, how long the person has spent on a task, what's the estimated time of arrival, will the driver reach the destination on time, is the vehicle idling and so on.
A key feature of last mile delivery management platform is an electronic proof of delivery or ePoD. It eliminates the physical paperwork involved in raising customer invoices. An end-customer can digitally sign a delivery receipt using her smart device. It's also a great way to store delivery details in a centralized repository for later access and analysis. Electronic proof of delivery empowers businesses to accurately capture the details of on-time in-full deliveries and gain insights into first-hand customer feedback.
Based on driver availability, past performance, proximity from store/customer among other factors, last mile delivery management software automatically allocates delivery tasks to executives. It automates delivery scheduling by keeping a set of tasks ready for drivers the previous day. Delivery executives can use a simple app to gain insights on the jobs he is supposed to complete in a given day.
Scaling deliveries is key to increasing bottom lines. A last mile platform quickly scans across hundreds of gig-economy markets a quickly on-boards temporary/part-time delivery executives to scale last mile operations on any given day. These executives are not randomly selected. Based on costs, availability duration, proximity, productivity etc. the software selects drivers.
Advanced last mile software improves customer engagement and experience by driving NLP (natural language processing) powered chatbot based customer support. This significantly reduces investment in human resources and customer query calls. NLP helps businesses understand customer concerns with less need for human intervention. NLP get smarter with time as the variety of questions increase.
Such software empowers businesses to make deliveries flexible for customers. The later can change delivery location and time on the fly based on their convenience. The software quickly accommodates the changes and updates delivery stakeholders regarding the same to eliminate confusions.
Last mile delivery software boosts transparency by empowering customers to track their orders through the final mile journey. At any given point in time, end-customers can know where their orders are, who is going to deliver, what's are the ETA s and so on.
FarEye is a last-mile delivery solutions company. It’s a SaaS platform trusted by over 150 enterprises. FarEye’s last mile delivery platform helps brands across industries gain efficiency when executing logistics operations while keeping costs under check and offering professional, technical help with a range of operations from delivery scheduling to allocation to routing to real-time tracking and tracing. FarEye's last-mile delivery software helps enterprises deliver the perfect last-mile experience to customers at optimal efficiency. To know more you can sign up for a quick demo here.