December 2, 2020
E-commerce sales have increased globally and is further expected to surpass $6.5 billion revenue by 2023. This only means further pressure on the last leg of the process i.e. ‘last mile delivery’. Let’s have a look at what it entails, their challenges, the factors involved in it and factors to consider that would help you choose the best for your company.
The supply chain involves three major processes; first mile, middle mile and the last mile.
First Mile involves distribution of the products from the manufacturer.
Whereas Second Mile is about long distance transportation of the goods which includes going through customs, ports storage and loading as well as inland transportation. During this process, the products are brought to the final station before being delivered.
Last Mile, the process in focus here, is vital to e-commerce operations. It is when couriers are sent out from local warehouse or fulfillment center for delivery to final destination.
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There are several factors that affect the last mile delivery logistics:
1. Customer expectations
Customers not only expect but now demand same-day deliveries as per the requirement. Many a times, customers pay extra amount for same-day delivery which often end up as a disappointment due to non-delivery but what they don’t know is that it affects the efficiency of last-mile delivery companies. This increased customer expectations encourage businesses to strategize delivery routes and prioritize the urgent deliveries in order to deliver at the earliest. Failing to do so costs them the result of poor customer satisfaction.
2. Issues from customers’ end
Plenty of customers add inadequate information and often incorrectly about themselves which result in the delay of deliveries. Issues like incomplete addresses, isolated areas, narrow locations or even absence of customers are not only responsible for the delay but also in increasing delivery costs which is borne by the companies.
3. Infrastructure
In developing countries, infrastructure plays a big role and is also a point of concern for mindful delivery. As delivering the parcels often involve long and arduous journeys through inefficient routes which add to the delivery time and disrupts the schedule. In addition to that, it increases the fuel cost due to all the driving around and finding the correct location. Thus poor infrastructure also becomes a barrier in the last mile delivery.
4. Type of goods
Sometimes the type of goods become a challenge to cargo bike courier services while transporting them through different places, be it crowded, distant or narrow locations. Fragile items like glassware, antiques, artifacts, perishable goods, and other tangible items pose a risk of getting damaged in transit. It requires care and some safety measures on last-mile company’s part to ensure damage-free delivery of these fragile items to their final destination.
5. Lack of visibility
Customers require and appreciate the visibility about their own parcels and real-time tracking is reassuring of the status of their deliveries and makes the delivery companies more reliable. Companies that offer poor transparency and updates are sure to suffer due to the lack of presenting a detailed view of their operations. Companies have to revise their work methods and equip themselves with latest technology in order to provide visibility and ensure complete customer satisfaction.
6. Transparency
One of the most common challenges facing courier companies is to maintain transparency. With advanced technologies in place, customers expect the companies to provide an end-to-end overview of their parcels that are being shipped. Customers now want to see the exact location of the rider who is scheduled to deliver their products, often to ensure that receiving is done by somebody and for an accurate estimation of time required in delivering the product.
Companies are now using cloud-based tracking solutions that keep the sender and receiver updated about the status. This way, they can be informed about any possible disruption in delivery process without having them to lodge complaints.
Last mile delivery happens to be the most expensive and time-consuming part of the shipping process therefore this industry poses its own unique challenges.
1. Navigation in urban areas
If you’re from an urban or metropolitan city, you’re already aware of narrow roads and terrible traffic where parking becomes near to impossible. This makes last mile deliveries time-consuming resulting in delays.
2. Navigation in rural areas
Whereas rural locations are vast and addresses are difficult to locate due to poor infrastructure which also increase travel time and cause delays.
3. Delivery of large and heavy items
Online shopping is now a common trend or rather favorite activity of many which means increased number of online deliveries of every sort of items including heavy home décor and furniture. In case of one individual carrying out the delivery, the logistics can become arduous and time-consuming.
4. Lack of resources
With the continual surge of e-commerce in every industry, there may be shortage of delivery vehicles and personnel. In order to overcome this, many businesses are relying on a rather pricey option of ad hoc vehicle acquisition.
Businesses could take advantage of the expanding market and take matters of deliveries into their own hands but that would only require them to set up a whole new department and start from scratch, not to mention the hiccups in the beginning. Or go with the wise option i.e. to partner with a third-party company. Here are a few factors to consider before choosing a last-mile delivery service for your business:
1. Fast delivery
Look into how the company is taking into account different variables like delivery windows, driver availability, location proximity, etc. to complete deliveries. Reading online reviews through Google, company’s website and social media accounts would also tell about others’ experience with the company.
2. Precise order tracking
Technology is driving the future of many businesses including last-mile delivery. It has revolutionized the way customers receive their orders through advanced order tracking and driverless deliveries making it easier and cost-effective for retailers to fulfill these orders. This helps customers feel appreciated, thus boosting their trust and enhancing customer experience.
3. Security and insurance
In e-commerce businesses, there is always a considerable risk involved whenever consumers decide to leave their purchased goods in courier company’s hands and trust them to have it delivered in a timely manner. Going with one that along with a guarantee to delivery safely offers an attractive insurance benefit on the off chance the package is mishandled would put your mind at ease.
4. Specialization
Another factor to consider is the type of vehicle you need which is the right fit for your operations. Whether you need a truck to transport a lot of or heavy items, but one that can maneuver through narrow urban streets. Taking your requirement into consideration, working with a specialized company such as a fleet management company or one that has a significant experience with retailers or one that specializes in construction may be the right choice.
5. Convenience
Company with a vast network of satellite branches situated in strategic locations provide easier access and convenience to its customers to drop off their parcels. Besides that, packages to be shipped are also offered to be picked up from your door. This coupled with technology has changed the game with apps in place taking last-mile delivery service to a whole new level.
A veteran logistics expert with decades of experience in freight distribution, operations and management.
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