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 goods and products from the warehouse to the customer’s address.
What 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, that 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. Hence, with every added inefficiency in the last mile process managing deliveries becomes more costly.
A few key problems that make the Last Mile always the longest:
- Cost of last-mile deliveries
- Lack of transparency
- Poor granular tracking
- Failed deliveries
- Inefficient routing and lack of route optimization
- Unpredictability in transit
- Lack of proper delivery infrastructure
- Outdated delivery tools and technologies
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 businesses to execute deliveries as fast as possible. Hence, making the challenges in the last leg of delivery more potent. With social distancing becoming the norm, the 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 to keep customers happy and loyal. 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 delivery operations to cater to the new demands of customers.
How do communication issues result in poor decision-making in the last mile?
The majority of the final mile problems arise due to miscommunication between the various delivery stakeholders. Businesses use 3PLs and carriers' physical infrastructure like warehouses or transport systems 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 the implementation of a platform that is able to provide real-time information, logistics challenges can be addressed by businesses. For example, if a route is facing traffic issues, 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 journey time, order completion, transportation costs, customer satisfaction, and so on. These platforms can be customized to access various other platforms like inventory or last mile delivery tracking systems and resent all information in a single dashboard in real-time.
5 ways to address last-mile problems in the 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 the bulk of orders arise, would reduce the last mile problem and can also be used as a pick-up or drop facility for customers. This also increases the ROI of warehouse operations by making inventory management seamless and less time-consuming.
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 boost potential ROI, save on total operational costs, reduce the time spent on the supply cycle, and plan highly efficient routes for multiple addresses in one go, and more.
3. Optimize Delivery Vehicle Routes and dynamic vehicle routing
Route planning can cut down delivery times dramatically. Investing in software that 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 delivery driver in real-time, thus making dynamic routing of the fleet possible.
4. Communicate With Customers in Real-time
Modern customers demand flexible deliveries as they are not always at home to receive their orders. Hence, 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 customer availability at the time and during regular office hours.
5. Implement an effective Real-Time Delivery Tracking System
Real-time delivery tracking would help companies and customers to keep track of the status of the package until it reaches the final destination. 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. The biggest challenges that threaten logistics operations can be solved by implementing an advanced solution to streamline the operations and make them work to maximum efficiency.
Top 10 benefits of a last-mile solution
Let us quickly go through some of the major game-changing benefits of such a solution that makes it such a big deal in managing modern delivery operations, especially for the e-commerce giants.
1. Faster and Same-Day Deliveries
With customers preferring delivery windows same-day or within a few hours, the final mile solution makes this possible through prioritizing, scheduling, and auto-allocation of packages. It also allows to change the time or location of deliveries, and handle cancellations or returns using this solution.
2. Improve Margins and Delivery Profitability
Such a solution brings a collection of analytical tools which would analyze the data in real-time. It would guide businesses to understand their weak points and areas for improvement. These analytics would help to improve profit margins and achieve profitability. Such a solution also improves margins by reducing delivery turnaround times, fuel consumption, labor costs, and operational expenses.
3. End-to-End Visibility of Delivery Operations
An advanced solution like this 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 clear transparency of the operations enabling to update customers on the movement of their ordered goods.
4. Enhanced Customer Experience
The last-mile delivery 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. An advanced logistics platform can add alternate delivery locations for a customer on the fly, especially in case of incorrect address instances or remote locations, to ensure better delivery success rates.
5. Automatic Route Planning
Such a solution provides automatic route planning for any number of shipments based on the customer's preferred delivery time windows, a 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 troubles 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 final mile logistics also would help businesses to generate a smaller carbon footprint.
7. Greater Delivery Productivity
Auto-scheduling and route optimization help to lessen the loading time and stop instances between halts in routes. This enables businesses to achieve greater delivery productivity. Advanced geo-locating tools also help businesses enhance address accuracy and drastically reduce numerous delivery attempts or increase first-attempt delivery success.
8. Seamless Reverse Logistics
Reverse logistics deals with returned goods from customers. A solution like this provides customers with the opportunity to seamlessly return orders and hence boost consumer confidence.
9. Scaling Delivery Operations
A modern solution like this 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. Such a solution promotes adaptability and scalability that will allow businesses to grow efficiently and modify services to best support last-mile carrier operations.
Final mile delivery is and will be the most complex final leg of the supply chain process. Businesses need to invest in a last-mile solution that will ensure to keep customers happy and promote the long-term success of the business. Rapidly evolving technology is paving the way for businesses to optimize their last-mile delivery processes and be more cost-effective.
How FarEye takes care of challenges that arise in the Final mile
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