The last few years have seen an unprecedented shift in consumer shopping preference from traditional to online. This has led to a sharp upward trend in the customers' demand for fast and free delivery.
To catch up with this rising trend and to stay competitive in the market, ecommerce companies across the globe are constantly looking for ways to cut down costs and improve efficiencies. And a company’s last-mile delivery process plays a key role in this movement. Last-mile routing is, in fact, one of the most crucial aspects of any ecommerce business. It typically refers to the last leg of the delivery process where the movement of the package from the last stop in the transit to its final destination takes place.
Top 4 Last-mile Routing Challenges & How Last Mile Routing Software Addresses Them
While the importance of the last-mile in ensuring the success of the supply-chain is undeniable, the challenges in making it successful and optimally efficient are quite a few as well.
Let's discuss the top 4 of those last-mile routing challenges that most companies face and ways to overcome them -
1. Late & Untimely Deliveries
Late and untimely deliveries are one of the most common problems for last-mile delivery services. There are several factors which could create a delay in the delivery timeline and interrupt your schedule, but even if the delay isn’t your fault, it could result in an unhappy and frustrated customer.
Poor and unplanned routes mean delayed deliveries, loss of revenue and profits and above all, unhappy customers. Last mile route optimization is an excellent way to save a great deal of time in terms of last-mile routing.
Unlike the usual route planning and global positioning measures, advanced technologies today like Artificial Intelligence (AI) and Machine Learning (ML) are using advanced data interpretations to analyze traffic congestion, road conditions and weather patterns to predict and recommend the right routes to drivers in real-time.
Another benefit of route optimisation is that the system helps to track progress and manage drivers efficiently, thereby improving last mile visibility.
2. High Shipping Cost
There have been studies that suggest that as high as 53 per cent of the total shipping costs for any average logistics company end up being spent in last-mile routing.
One of the main reasons for this extended cost of shipping is the rapid rise of ecommerce in the last decade.
With a fiercely competitive market where most of the players are offering free shipping to first time buyers, the shoppers do not want to pay shipping charges anymore. This results in retailers having to bear the entire cost of shipping.
Partnering with a professional courier service and including their shipping costs in your shipment prices is one of the good ways to manage high shipping costs. This allows you to offer a fixed price to your customers with a built-in shipping rate included.
3. Lack Of Transparency & Poor Last Mile Route Optimization
Customers of the ecommerce industry have a basic expectation of timely deliveries. But, this doesn’t always happen as there are often delays for various unexpected circumstances that could completely disrupt the delivery timeline. another challenge is inability to optimize routes. Traditional routing practices have limitations when it comes to optimizing routes in real-time.
What customers want in such a situation is transparency from their supply chain service provider. They want to have the ability to track their packages and get the updates in real-time.
To ensure efficient last-mile routing, it is important to keep the customer in the loop with consistent and timely notifications throughout the delivery process. Robust communication helps to ensure both customer satisfaction and availability of customers at the time and place of delivery.
4. Complex Delivery Environment
Executing different routes, especially in the densely packed suburbs and cities, is one of the main challenges for last-mile carrier professionals. Apart from the safety concerns, managing customer expectations for a quick turnaround time, even in rural areas, is a common challenge that companies face.
eCommerce companies need to think of innovative last mile delivery solutions such as fixed locations for picking up the items, where retailers let the customers collect their shipment from a specific location like a nearby convenience store.
With growing competition, the only way that the companies can meet the challenges of eCommerce deliveries is by efficiently tackling last-mile logistics with tools such as good delivery management software.
This shows the importance of leveraging technological innovations such as autonomous vehicles, drones and robots for delivering packages and how they can help companies overcome their last-mile routing challenges. You ought to start now with the process of automation, to get to a place of automation that we're going to see in the coming years.