The way we shop online is nothing short of a fairytale: come rain or shine, products arrive at our doorsteps, no matter where we live.
For the companies dispatching the last mile carrier, though, juggling routes, ETAs, bad weather and no-shows can quickly become a nightmare.
What is final mile delivery all about? Why is it the most vital part of transport management systems in the age of customer experience? We’ll explore those questions and more.
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Article Roadmap
- What Is a Last Mile Carrier?
- The Importance of Last-Mile Delivery in Logistics
- Last-Mile Carrier Solutions
- Next Steps
What Is a Last-Mile Carrier?
A last-mile carrier is a logistics company or service provider responsible for transporting a product from a hub or warehouse to its final destination, typically a personal residence or retail store.
This final leg of delivery is a critical component in the shipping process as it often has a significant impact on customer satisfaction and overall logistics efficiency.
Beyond just delivery, these carriers handle challenges like navigating traffic, providing shipment updates and managing customer interactions. As customer service emerges as a burgeoning eCommerce trend, final mile delivery becomes costlier and more complex.
We’ll explain why in the following sections.
The Importance of Last-Mile Delivery
Final mile delivery is costlier and tougher to perfect than the first and mid-mile.
Capgemini reports that 41% of supply chain costs go into final-mile deliveries.
Customer expectations drive up costs because a whopping 86% of consumers would wait three days for their packages, while 30% want them within a day.
This drive for fast delivery is one of the many reasons why last-mile delivery is so expensive. Here are a few more examples of why this process costs so much.
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- Fewer Deliveries: Last-mile delivery entails bringing many smaller goods to a single location. However, the cost of delivering one box of supplies to a residence is equivalent to the cost of shipping a hundred boxes to a store.
- Urban Settings: Traffic congestion and frequent pauses often result in lower average speeds, longer stays on the road, more idling and lower gas mileage.
- Complicated Routes: With so many separate stops, drivers find it nearly impossible to figure out effective routes, resulting in a lot of needless miles. As a result, fuel, labor and vehicular upkeep expenses go up.
- Failed Deliveries: There are numerous reasons for unsuccessful deliveries, the most prevalent of which are that the customer isn’t at home, the driver can’t locate the address or the driver is unable to enter the building. Every unsuccessful delivery must be rescheduled or refunded, which can incur enormous costs.
- Regulatory Issues: A variety of regulations might impact delivery costs. Many cities are tightening emission norms to tackle air pollution. Companies may need to invest in newer, cleaner vehicles as a result.
Other Considerations
Operational costs aren’t the only things complicating matters. Now, we’ll discuss non-financial considerations that affect last-mile deliveries.
Consumer Experience
The last mile is the point of contact between businesses and consumers. With just a single sour delivery experience, customers can look up alternatives, and businesses can lose their competitive edge.
Customers’ doorsteps are the new storefronts; buyers went from prioritizing brands to visibility, and businesses are incorporating all this newness into their last-mile carriers.
A Convey survey found that 83% of retailers recognize customer experience as a primary goal and feel the need to improve it.
What’s the shared vision for such an improvement? Let’s hear it from an industry expert.
Jim Hourigan, COO at BuildDirect, told Convey:
We want to invest in a situation where if a customer orders patio furniture, […] they’re not thinking about the delivery, they’re not thinking about the set-up, they’re thinking about the party they’re going to have that weekend. […] We want to invest in those types of things to make that experience happen.”
Sustainability Parameters
With mounting environmental concerns, logisticians face a near-impossible dilemma: increasing the number of last-mile carriers with several stops while decreasing emissions.
The industry rolled out carbon-neutral trucks, self-driving freight, logistics outsourcing and hyper-local deliveries to match this trend.
Despite that, a 32% rise in carbon emissions due to urban delivery traffic threatens to thwart the industry’s progress by 2030.
BPM Integration
Have you ever encountered that one unmissable product recommendation on the checkout page? Perhaps the perfect replaceable nozzle for that pressure washer in your cart. That’s a job well done by a company using business process management software.
BPM involves analyzing a business’s techniques and activities to achieve targets and maintain customer satisfaction. Businesses can offer dynamic shopping experiences with its help — omnichannel retail, custom recommendations, easy returns and more.
Yet, it is a largely unexplored area in the last mile.
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Last-Mile Carrier Solutions
Technology is the overarching solution to last-mile needs, but with diverse delivery options for consumers, it’s crucial to optimize end-to-end omnichannel fulfillment efficiently, minimizing costs.
Here’s a rundown of last-mile carrier software features that’ll serve both businesses and consumers.
Package and Vehicle Tracking
Since visibility is critical, companies must invest in a transportation management system that unlocks the following benefits:
- Predictive visibility to reduce complexity
- Automated unification of carrier fleets
- Route optimization with AI and ML
- Deep analytics to manage order exceptions based on insights
End-to-end visibility looks a bit different on the customer’s side. To give your buyers visibility on their packages as well as the carriers, consider a dispatch platform that’ll make scheduling tasks and tracking progress a breeze.
Customers stay satisfied when they receive SMS alerts, ETA updates and driver communication.
Intelligent Carrier Selection
This TMS module automatically selects the best carrier for each shipment based on factors including cost-effectiveness, delivery speed and route efficiency.
Minimize logistical hiccups and guarantee customer satisfaction through reliable, custom-fit delivery solutions.
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Advanced Route Planning
If you’re trying to go green, this TMS feature is a must. Bernd Heid, senior partner at McKinsey & Company, explains in an article from Mer:
[…] in an ‘ecosystem scenario’ in which both public and private players work together effectively, delivery emissions and congestion could be reduced by 30 percent until 2030 when compared to a ‘do nothing’ scenario, and technology can help to bring delivery costs down by 25 percent at the same time.”
Route planning modules account for variables like traffic, distance, and priority deliveries, striving for reduced delivery times and fuel costs.
Manual planning can’t accommodate sudden road closures or roadblocks, causing unplanned diversions.
Plan and dispatch loads along optimized routes. Source
Besides being time-consuming, manual planning fails to decrease your company’s carbon footprint and can negatively impact both the environment and your company’s reputation.
Electronic Logging Devices
ELDs collect and display real-time data on trip inspections, directions, PoD (Proof of Delivery) capture, and exception reports, enabling timely decision-making and problem resolution.
They also compile crucial data about load, route, customer and asset, providing a comprehensive view of operations at any moment.
With all relevant information at your fingertips, you can streamline processes, resolve issues in real time and deliver efficient last-mile services.
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Next Steps
Speed and transparency may not go hand in hand, but last-mile carrier software combines them to transform your final mile crawl into a sprint.
Want to take all the above TMS modules and throw them in a mix? Download our free in-depth comparison report to get curated software insights and cut costs, carbon footprints and unnecessary data abstraction.
Which customer-oriented feature is a must-have in a last-mile carrier solution? Chime in with your ideas in the comments below!