Last mile delivery places your business’ customer service priority in the spotlight.
The final mile is extremely important for your business. A report by Straits Research has found that about 75% of customers report experiencing delivery issues when shopping online. This negatively affects the whole shopping experience.
Besides eating into your reputation, delivery delays, product exchanges, and consumer refunds may quickly mount up and eat away at your e-commerce profit margins.
The last mile delivery in logistics is where you as the business, have to try and meet customer expectations while also navigating through operational challenges.
In this comprehensive guide, we explore how new technology, operational strategies, and real-world examples are shaping the future of last mile delivery.
What Is Last Mile Delivery?
Last mile delivery is the last connection in the e-commerce supply chain. It physically links customers and brands through their purchase delivery.
In this last leg of the supply chain journey, the products ordered are delivered to the customer’s home or office. But it could also be to a parcel locker.
The journey it travels is from the warehouse or distribution center. It’s a short but very precise route that can determine how customers respond and rate their overall experience.
It’s also the most costly one. Last mile delivery takes up almost half of the budget for the entire supply chain. This part of the delivery is extremely important, as it’s the sole point of contact between a consumer and the brand.
“Providing a seamless order-to-delivery experience has become the global retail industry’s holy grail. It is essential to provide customers with a top-notch brand experience and maintain brand loyalty,” says Straights Research.
WATCH: Here are the ten best last mile delivery software
The Importance of Last Mile Delivery
Last mile delivery is the most complex part of the supply chain. You need to juggle three parts of it.
- Customer expectation.
- Operational complexity.
- Environmental impact.
Customer Expectation
If a customer places a small order that’s in stock this morning, they expect it to be delivered before the end of the day.
Why? Because big companies like Amazon, which has been around for 30 years, have set that high expectation for customers to demand faster last mile delivery.
Amazon has invested in same-day and next-day delivery for a couple of years now. This highlights the increasing expectation for rapid service.
Nearly 60% of Prime orders in top US metro areas now arrive within a day. This shows how the demand for fast last mile delivery has changed.
Operational Complexity
Delivering to diverse locations with varying conditions during the last mile requires precise planning.
Here’s a real-life example: Amazon uses micro-fulfillment centers to solve the problem of proximity.
It positions stock closer to urban customers and reduces delivery times and costs.
But what about rural areas? There are logistical challenges like longer routes and fewer available resources that make it difficult.
That’s why businesses are advised to use route optimization for effective last mile delivery.
Route optimization automatically chooses the shortest and most efficient route for each delivery.
Environmental Impact
Walmart claims by simply using route optimization for their last mile delivery, they have avoided 94 million pounds of CO² by eliminating 30 million unnecessary miles driven. They have also optimized routes to bypass 110,000 inefficient paths.
Urban congestion and carbon emissions make sustainability a growing concern. Customers are more conscious about the impact their deliveries have on the environment.
Customers are actively searching for businesses that are more responsible with last mile delivery, taking the environment into account.
Last Mile Delivery Strategies for Modern Businesses
Growing your business while navigating challenges with the cost of last mile delivery sounds tough. But by investing in technology and artificial intelligence (AI), you can streamline operations and win with speed and accuracy.
Route Optimization: Future of Transport
Imagine a delivery service in a congested urban area like New York City. There are bottlenecks everywhere and frustrated drivers stuck behind other cars.
The smart way around this is to avoid it altogether. But how? There is a way, and it’s not by using Google Maps.
Route optimization automatically updates the routes so that drivers don’t get stuck in any traffic. This way, drivers can ensure that deliveries reach customers faster and at a lower cost.
How does this help modern businesses grow?
When your fleet spends less time on the road idling behind other cars, less is spent on fuel consumption every month.
Route optimization also helps with improving delivery times during the last mile. As a result customer satisfaction and loyalty rise.
Technology Drives Last-Mile Delivery
We see drones delivering packages to customers in their backyards, robots delivering packages to front porches, and electric vehicles delivering stock to warehouses.
This is a new era of delivery, and technology is moving quickly to improve the last-mile and same-day delivery rates.
Drone deliveries are cutting transportation costs and are navigating through urban areas with ease. The drone delivery market is estimated to reach $17.29 billion by 2029.
How are drones changing the last mile delivery scene?
- Faster delivery by avoiding traffic.
- Cost efficiency, as a single pilot can manage multiple drones.
Robotic couriers navigate sidewalks and deliver packages directly to customers. It’s more efficient and compact than sending a delivery driver into a busy office block for the last mile delivery.
Now, let’s think about electric vehicles (EVs) and the growing need to prioritize sustainability during the last mile delivery process.
Transport contributes over a third of CO2 emissions, and companies like Amazon are combating this with AI-powered electric fleets.
Operational Secrets for Faster Last Mile Delivery
There are three main features that can unlock a last mile delivery process that is much faster than your competitor. Route optimization, dynamic scheduling, and real-time tracking.
With these three last-mile logistics tools, there are more efficient routes, better communication with customers, and easy response time in case of a last-mile delivery problem.
Route Optimization
Efficient route planning is essential to reduce delivery times and costs. Walmart is even using AI-powered route optimization for the last mile delivery process, and has eliminated 30 million unnecessary miles, reducing both emissions and expenses.
Dynamic Scheduling
Dynamic scheduling adjusts delivery plans in real-time. Let’s say there is a customer who wants to adjust an order, but the delivery driver is heading into a bad weather storm.
Dynamic scheduling helps to make sure delayed packages during the last mile delivery can be reassigned to closer drivers to ensure timely delivery.
Real-Time Tracking
Real-time tracking provides transparency and builds trust. According to a survey by Digital Commerce, 93% of customers want to stay informed during the delivery process.
Another 47% say they will not order again from a company with poor visibility during the delivery process.
Key Features of Last Mile Delivery Software
Adopting the right delivery software is critical for effective same-day delivery. The last mile delivery process has to be fast and efficient.
Some standout features to make it faster include:
- Proof of Delivery (PoD): Digital tools like Locate2u’s PoD allow drivers to capture photos or signatures, reassuring customers that there was no last-mile delivery problem.
- Driver Feedback: Giving customers a platform to give feedback empowers and motivates drivers to perform better.
- Customer Communication: Automated notifications and live chat with drivers enhance the delivery experience and reduce frustration when the delivery service goes wrong.
Conclusion: Mastering the Last Mile
The last mile is more than just a delivery process—it’s a competitive advantage.
The last mile delivery can set your business up for better results if you embrace cutting-edge technologies like drones and AI to compete in the same-day delivery space.
Optimizing operations with real-time tracking, better delivery routes and dynamic scheduling, your businesses can be a front runner in last mile delivery.
Industry leaders like Amazon and Walmart are continuously innovating and collaborating with technology to stay competitive.
Investing in tools and software to improve last-mile delivery can help your business grow faster than you think.
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
