Solving The Last Mile Delivery Problem in 2021 & Beyond

Logistics industry is flourishing and increasing demand for a faster and effective service has made last-mile delivery one of the most crucial parts of supply chain management. Last-mile delivery refers to the process of transporting products from the warehouse to the customer’s address. 

What exactly is the last mile problem?

The main objective of last mile logistics is to deliver the package to the customer as soon as possible. The last mile problem is, while customers want deliveries to be free and fast, it also is the most expensive and time-consuming part of the supply chain process amounting up to 53% of the total cost of shipping.

A few key last mile problem faced are:

  • Cost of last mile deliveries
  • Lack of transparency
  • Poor granular tracking
  • Failed deliveries
  • Route optimization
  • Unpredictability in transit
  • Lack of proper Infrastructure
  • Embracing new technology

How COVID-19 made the last mile delivery problem more complex

The Covid-19 pandemic has resulted in an increased e-commerce buying and customers' need for faster deliveries. Hence, making the last mile problem more potent. With social distancing becoming the norm, preference for a contactless delivery system has increased. 

Businesses, while adhering to hygienic guidelines and sanitization procedures also had to take additional precautionary measures like keeping track of body temperature of staff. With the chances of getting infected by the virus from cash transactions being high, contactless payment methods had to be adapted. The pandemic had made businesses revamp their last mile operations to cater to the new demands of customers.

Why do last mile problems in communication result in poor decision making?

Majority of the last mile problems arise due to miscommunication between the various delivery stakeholders. Businesses use 3PLs physical infrastructure like warehouse or transport system to enhance their service quality without having to invest or purchase the same. Issues happen when warehouse managers have difficulty in maintaining proper inventory which results in shipping and delivery delays.

With implementation of a platform that is able to provide real-time information, last mile problems can be addressed by businesses. For example, if a route is facing traffic problems, the vehicle can be immediately re-routed to avoid delays. The platform’s business intelligence tools will aid businesses to analyze data and track their performance based on parameters like delivery time, order completion, transportation costs, customer satisfaction and so on. These platforms can be customized to access various other platforms like inventory or tracking system and resent all information in a single dashboard in real-time.

5 ways to address last mile problem in supply chain

 1. Improve Customer-Warehouse Proximity

The last distribution center or warehouse should ideally be located nearer to the customers. This saves money in the long-run and also helps to minimize delivery times, cost, and fuel usage. Warehouse proximity to regions where bulk of orders arises, would improve the last mile problem and can also be used as a pick-up or drop facility for customers. 

2. Invest in Technology for Delivery Optimization

New technologies are enabling process improvements with their capabilities to analyze real-time information for better decision making. These technologies integrate machine learning and AI-based solutions for route navigation, driver allotment, etc. which enables businesses to save on total operational costs, reduce supply cycle time and improve on last mile challenges.

3. Optimize Delivery Routes and dynamic routing

Route planning can cut down delivery times dramatically. By investing in software which schedules routes automatically based on past routes but also takes into account parameters like time, location, vehicle capacity, and traffic to recommend the most efficient routes.

Any updates on traffic that could affect timelines can be communicated to the driver in real-time, thus making dynamic routing of fleet possible.

4. Communicate With Customers in Real-time

Customers need to be informed with regular notifications throughout the shipping process about what’s happening with their package. This not only benefits the customer but the driver as well as it ensures customers availability at the time and address.

5. Implement effective Real-Time Delivery Tracking System 

Real-time delivery tracking would help companies and customers to keep track about the status of the package. This tracking would allow companies to share updates on deliveries in real-time.

Problems like missed schedules, issues in route optimization, lack of proof of delivery, unable to support contactless payments can affect customer experience and business. These problems can be solved by implementing a last mile solution to streamline the last mile challenges and make it work to maximum efficiency. 

Top 10 benefits of a last mile solution

1. Faster and Same Day Deliveries

With customers preferring delivery windows same-day or within few hours, last mile solution makes this possible through prioritizing, scheduling and auto-allocation of packages. It also allows to change the time or location of deliveries, handle cancellations or returns using this solution. 

2. Improve Margins and Delivery Profitability

Last mile solution brings a collection of analytical tools which would analyze the data in real-time. It would guide businesses to understand its weak points and areas for improvement. These analytics would help to improve profit margins and achieve profitability.

3. End-to-End Visibility of Delivery Operations

A last mile solution helps to capture dispatch information in real-time and makes it accessible to stakeholders and customers through cloud-based data repositories, data processing systems, notifications and alerts. This results in a clear transparency of the operations enabling to update customers on the movement of their ordered goods.

4. Enhanced Customer Experience

Last mile solution provides tools to update customers with real-time status updates of their shipments. These updates can be sent via email, SMS, WhatsApp, in-app notifications or a phone call to inform customers of any delay in delivery or cancellation. Being able to communicate effectively with customers can lead to steady business and increased customer satisfaction.

5. Automatic Route Planning

Last mile solution provides automatic route planning based on the customer's preferred delivery time windows, maximum number of deliverable points and shortest routes to save on fuel costs. It helps to calculate the best possible route for maximum delivery points by taking real-time problems like traffic or weather conditions into consideration.

6. Smaller Carbon Footprint

Empty miles and fuel costs can be reduced by implementing effective route planning and auto scheduling. Usage of electric or battery operated vehicles and bikes to cover the last mile logistics also would help businesses to generate a smaller carbon footprint.

7. Greater Delivery Productivity

Auto-scheduling and route optimization helps to lessen the loading time and stop instances between halts in routes. This enables businesses to achieve greater delivery productivity.

8. Seamless Reverse Logistics

Reverse logistics deals with returned goods from customers. Last mile solution provides customers with the opportunity to return goods which boosts confidence and often increases sales, enough to offset the cost of reverse logistics. 

9. Scaling Delivery Operations

Last mile solution would help to make crowdsourcing logistics possible. The right tools can enable businesses to quickly recruit services of temporary drivers and also take care of routine tasks like driver registration and assessment. The right solution will manage rosters, monitor driver location and progress and schedule breaks thus allowing businesses to scale operations.

10. Better Control of 3PL operations

Logistics providers and 3PLs can improve efficiency by utilizing software that can automate and speed up their logistics processes. Last mile solution promotes adaptability and scalability that will allow businesses to grow efficiently and modify services to best support 3PL operations.

Last mile delivery is and will be the most complex final leg of the supply chain process. Businesses need to invest in last mile delivery software that will ensure to keep customers happy and promote long-term success of the business. Rapidly-evolving technology is paving the way for businesses to optimize their last mile problems and be more cost-effective in achieving last mile deliverables.

How FarEye ensures the last mile problem is taken care of

FarEye is a customizable SaaS based delivery management platform that helps to keep costs under check providing a range of operations like delivery scheduling, task allocation, routing, tracing and more. FarEye's last mile software empowers enterprises with the following capabilities:

  • Fully customizable solution
  • Automatic order allocation
  • Automatic dispatching
  • Chatbot-based customer support
  • Real-time dynamic routing
  • Flexible delivery scheduling
  • Customer live delivery tracking app
  • Electronic proof of delivery

To know how FarEye can empower your organization to address the modern last mile delivery problem, you can quickly sign up for a demo here.