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 fulfillment 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 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.
Before we delve deeper into the nuances of last mile processes, let’s quickly understand what it is in the first place.
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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, 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 for 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 touch point 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 behavior, 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 fulfill this expectation. This entire turn-around process of fulfillment 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.
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.