Rapid increase in the popularity of online buying is changing the way enterprises execute last-mile delivery operations. The time-frames required to carry out fulfillment are shrinking every year as customers are getting more exposed to faster and convenient delivery options. As much as 97% of consumers consider same-day shipping as “fast.” Clearly customer expectations are evolving faster than enterprises can manoeuvre their regular supply chain and logistics operations. Hence, to outpace customer expectations savvy businesses are revisiting their existing last-mile delivery strategies and are introducing slew of changes, optimizations and enhancements to address some of the most critical delivery challenges in modern day logistics operations.
Rising same day delivery expectations, poor routing, disjointed IT architecture, COVID-19 regulations, demand for hyperlocal deliveries, rigid logistics operations and the need to adhere to environmental sustainability standards are some of the major challenges smart businesses are focusing on to improve customer experience, ensure better margins and keep up with changing business and consumer needs.
Let’s focus on the 7 above mentioned challenges in this blog.
By now every retailer knows that as much as 88% of consumers will pay for same-day delivery. Yes, in a world where free deliveries have become elementary, customers are willing to walk that extra mile and pay for a delivery that’s executed in a day’s time. This speaks volumes about the growing significance of same day deliveries. Now, why is this challenge for businesses? Fulfilling same day delivery expectations is easier said than done. To deliver on such delivery expectations, businesses need to simultaneously dispatch multiple vehicles at the same time, but in reality it’s difficult to achieve this as vehicle availability is incoherent. Then there is a need to find the most efficient route to a customer’s location, something that traditional routing practices fail to deliver. Same day deliveries mostly include movement of small packages. This results in under utilization of vehicle capacity as to abide by timelines one cannot plan routes within too many drop-points. Hence, per unit cost of delivery considerably increases.
Traditional routing practices make it extremely difficult if not impossible to fulfill orders on the same day. These practices have inherent limitations when it comes to assigning delivery tasks based on historical driver KPIs, real-time fleet or vehicle location and route performance. Planning routes is not easy. It’s much more than just moving packages from point A to point B. There is so much more. Businesses need to consider factors like fuel costs, driver productivity, risks, one way windows, delivery urgency among other things. On the other hand, with highly efficient delivery routes in place businesses can dispatch delivery tasks within seconds.
To ensure optimum performance of last-mile operations, gaining a hundred percent visibility of delivery activities is crucial. But businesses with traditional IT-infrastructure suffer from poor or zero system interoperability that makes ground-level logistics operations opaque. For instance, if your WMS (warehouse management systems) are not in sync with 3PL systems, a delivery manager will barely have any visibility over a package’s movement from a warehouse to a delivery hub. In other words it becomes difficult to assess on-time pickups, onward journey stoppages, route diversions and so on. These inefficiencies keep adding extra minutes/hours to the last mile, making it difficult to deliver on customer expectations.
The ongoing health crisis is also contributing to last-mile delivery complexities. For instance there has never been such an urgent need to ensure contactless deliveries. Contactless deliveries mean handing over a package to the customer without any physical interaction or keeping the order at a customer’s doorstep. To drive contactless deliveries it's important to ensure zero-cash transactions. This means deploying tools that allow businesses to receive payments through digital wallets. Paying online while placing an order is another option, but wallet payments are more customized in nature resulting better delivery experience. The ongoing pandemic is also driving the need to increase customer transparency. Businesses need to design delivery workflows that highlight the health status of delivery executives, store staff and kitchen staff to customers. Only advanced digital tools can help enterprises imbibe these capabilities into every-day delivery operations and hence, banking on existing processes might not be wise.
Hyperlocal deliveries refer to those delivery jobs that are executed within a defined neighbourhood, say a particular block in a small city. Now, owing to rapid changes in what customers buy online, things like grocery, medicines, household products, and even small machinery are being delivered at a hyperlocal scale. The problem is businesses find it difficult to keep up with the pace of demand for hyperlocal deliveries and scale logistics operations to seize hyperlocal opportunities. Another roadblock with regards to hyperlocal deliveries is the need to bring fulfillment centers closer to customers so as to reduce the time required for executing last-mile operations.
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In the age of same day and hyperlocal deliveries, businesses cannot afford to have rigid delivery operations. They need to adjust and update delivery workflows on the go based on when a customer wants her product to be delivered and where she wants it to be delivered. It’s really a challenge to incorporate constantly changing customer preferences when delivery processes are highly dependent on manual intervention, something that’s common among a large number of businesses.
Compliance and government regulations have been pressurizing businesses to reduce their CO2 footprint while executing logistics operations. But it will be a whole new game and logistics urgency when the need for eco-friendly deliveries will be driven by customers. Already retail customers are voicing their concern regarding the same. As much as 48% of consumers are in favour of their delivery to be carbon-neutral. Businesses will be in a tight spot with regards to this expectation. On one side they will need to keep increasing the number of deliveries per day to drive same-day deliveries and at the same time reduce the miles travelled per day to shrink carbon footprint.
A modern last mile delivery solution, like FarEye, can seamlessly address these challenges by empowering enterprises with advanced routing capabilities, helping them scale delivery operations, reduce their carbon footprint, shrink delivery turn-around-time and do much more. Signup for a quick demo here to understand how we are making this possible for 150+ global businesses.