We all know that E-Commerce sales have increased tremendously in the past few years. This has made the businesses pay more attention to all the areas of their supply chains, especially the Last-mile delivery. The last-mile delivery is a bit complex, time-consuming and expensive particularly in the case of e-commerce business.
In this blog, I am going to explain what is last-mile delivery, its importance, the challenges in last-mile delivery, and ways to resolve them.
So let’s get into the detail.
What is Last-Mile Delivery?
The transit of products from a transportation hub to the ultimate delivery location is referred to as last-mile delivery. Usually, a person’s home is the final delivery location. Delivering goods to the final user as quickly as feasible is the main goal of last-mile logistics.
Due to the rising demand for fully integrated omnichannel retailing, last-mile logistics has been a popular topic of focus for retailers. Retailers have been compelled to assess the capabilities of their current transportation networks and make improvements as a result of changing omnichannel requirements.
Since last-mile logistics frequently serve as a significant point of differentiation for merchants, attention has been paid to this area. Retailers and their supply chain partners must deliver great service to win market share and foster brand loyalty because consumers can readily shop for alternative products.
More than 53% of the overall shipping costs go toward the final mile or last mile of your product’s delivery.
Inefficiencies can result in exorbitant prices if your process isn’t optimized, which would increase your overhead and reduce your company’s profit.
Importance of Last-mile Delivery
The last-mile delivery is still essential to the production of a product and its availability to clients. First- and middle-mile deliveries are backend services that don’t deal with customers directly. Your first point of contact with customers is through your last-mile delivery system.
Consumers must either physically pick up their purchases from a store or distribution center if last-mile delivery is removed from the equation. Therefore, a buyer must pay for both the product and the delivery of it to their location.
In addition to the price, a buyer may also have to deal with problems including delays, product handling, item tracking, and damages during shipment. Customers may get products delivered to their doorsteps using last-mile delivery, and they can even follow every stage of the transit process. It gives clients the option to select between doorstep delivery or self-pickup of their purchases.
Last-Mile Delivery Challenges
The most common challenges with Last-mile delivery are as mentioned below:
Last-Mile Delivery Cost
Even though 86 percent of customers are willing to pay extra for quicker deliveries, most businesses still struggle to do it without incurring losses. Adhering to promised ETAs is a challenge in and of itself due to fines for late deliveries. Additionally, the demand unpredictability makes it extremely difficult to decide how much inventory to keep on hand, how to handle temporary workers and other aspects that affect overhead costs.
Delivery Allocation & Address Location
A survey found that 65% of retailers concur that unsuccessful deliveries caused by poor address quality have a considerable negative impact on delivery profitability.
It follows that it is not unexpected that destination grouping/management is frequently a severe problem. There is a lot of room for human mistakes because many brands assign assignments by hand. On a specific route, goods are invariably misallocated or missed.
Additionally, there are issues with poor address quality, inaccurate addresses, and inadequate signage. These are sufficient justifications to permit the delivery expert to wander through the endless, tiresomely drawn-out and intricate maze.
Route Optimization and Improving Routing Efficiency
Planning your route is a necessary task. It’s mentally demanding, completely perplexing, and subject to a wide range of varying conditions, such as fuel efficiency and environmental restrictions. But it still needs to be done. Accurate route planning is essential for a successful delivery that pleases clients while being economical. Routing effectiveness is a crucial factor in the performance of last-mile deliveries due to the increasing requirements of sustainability and fuel cost management.
This last-mile logistics problem is difficult to solve. If there is one thing you should expect, whether it is a divine or human act, it is unpredictability. This is uncontrollable and always occurs 2 out of every 10 times. The least that brands can do is to put a communication strategy in place, ensuring that the delays are alerted to the relevant stakeholders.
First attempt delivery failures brought on by the unavailability of the consumer represent a significant last-mile delivery difficulty.
Even with all your efforts, if a customer’s absence causes the delivery deadline to be missed, the client will still have a less-than-pleasant experience, which will lessen the impact of all your efforts in this area. In order to ensure seamless collaboration and communication channels between your agents and clients, it is imperative that you have the proper checks and balances in place.
Ways to Resolve Last-Mile Delivery Problems
Boost Proximity between Customers and Warehouses
The final warehouse or distribution hub should preferably be situated closer to the customers. Long-term financial savings are made as a result, and it also reduces delivery times, costs, and fuel consumption. The last mile problem could be reduced by placing the warehouse close to the areas where the majority of orders are placed. Customers could also utilize the warehouse as a pick-up or drop-off location. Making inventory management simple and quick, also raises the ROI of warehouse operations.
Invest in Technology to Optimise Delivery
With their capacity to analyze real-time information for better decision-making, new technologies are allowing process improvements. These technologies combine machine learning and AI-based solutions for route navigation, driver allocation, etc., enabling organizations to increase potential ROI, lower overall operational expenses, shorten the supply cycle, plan highly efficient routes for many locations at once, and more.
Boost Delivery Vehicle Routes and Flexible Vehicle Routing
Delivery times can be significantly shortened with route planning. Purchasing software that automatically plans routes based on prior routes while also recommending the most effective routes depending on factors like time, location, vehicle capacity, and traffic.
Dynamic fleet routing is made feasible by the ability to instantly inform delivery drivers of any traffic updates that can have an impact on delivery times.
Communicate With Customers in Real-Time
Due to the fact that they are not constantly at home to collect their orders, modern clients expect flexible deliveries. As a result, clients must receive regular alerts about the status of their packages throughout the delivery process. This is advantageous to both the customer and the driver because it guarantees customer availability at the appointed time and during regular business hours.
Use a Reliable Real-Time Delivery Tracking System
Real-time delivery monitoring would make it easier for businesses and clients to monitor a package’s progress until it gets to its destination. Companies might communicate real-time updates on deliveries thanks to this tracking.
Missed deadlines, difficulties with route optimization, a lack of delivery proof, and the inability to accept contactless payments are all concerns that can harm both the customer experience and the business. By using a cutting-edge solution to simplify the operations and ensure that they function as efficiently as possible, the major problems that threaten logistics operations can be resolved.
Optimizing last-mile deliveries is still a challenging task that is projected to get increasingly more difficult given rising customer expectations, expanding e-commerce sales, and developing technology. To keep their clients and stay competitive, businesses must address these issues right now.
Your business can overcome these obstacles by collaborating with an inventive, reputable last-mile provider that offers exceptional service customized to your needs. You’ll be able to manage costs, improve client connections, and promote long-term success. AVG Logistics Limited is one of the best Logistics Companies in India and specialized in handling all your logistics needs.
The ability to deliver exactly when clients want it, every day of the year, is most crucial.
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