As e-commerce continues to grow, so does our demand to have everything now. Online retailers and logistics companies have to keep up with that demand. They offer same-day delivery and other courier options to meet those needs.
Unfortunately, the last stage in the process called last mile logistics doesn’t always live up to those promises. The holiday season is a perfect example.
Almost 18 billion cards, parcels, and packages get delivered during the holidays by the three biggest U.S. shippers. But how many of your packages or cards didn’t get to you in time, despite these companies adding a larger workforce?
Final mile delivery is one of the toughest challenges carriers face. It’s also one of the most frustrating for customers. In this guide, we explain what last mile logistics means and how to overcome its challenges.
What is Last Mile Logistics?
As you can imagine, it takes many steps to get a product into your hands. After the design and prototype get approved, a product gets manufactured and packaged. From there, it gets moved to a warehouse where it awaits its fate.
Some companies store their own products while others ship them to an off-site warehouse or storage facility. After an order gets placed – either by a retail buyer or an end-user, the product is on the move!
Last mile logistics, sometimes referred to as final mile delivery, is the final step in the shipping process. It’s when goods move from a transportation hub to their final destination. This is typically your front door or receiving dock.
The Last Mile Problem
It doesn’t sound like there should be any issues with the final mile, but there are more issues at the final stage that at any point in the chain. Believe it or not, it’s also the most expensive part of the process. Last mile logistics account for 40-50% of a company’s total logistics costs.
For decades, carriers have improved on different techniques and technology but it’s still not where it should be. There’s added pressure on shippers to be faster than the next company or they’ll lose business.
When you track a package and get the “out for delivery” response, you’re elated. But then the waiting game sets in. In your mind, you think it means you should be hearing the truck’s backup beep any minute.
In reality, it only means your package is on a truck somewhere in your delivery area. That’s part of the last mile problem.
In rural areas, a truck could have many deliveries on a route. If there’s a hold up on any of the stops, your delivery time gets pushed further back.
But there’s also a demand for accuracy whether your package is on the truck or on your neighbor’s front step. That’s one of the biggest challenges carriers face.
What are the Challenges of Last Mile Logistics?
The challenges of last mile logistics involve several factors. While every company can pinpoint their own deficiencies in last mile delivery, some factors are universal to some extent.
Customer nuances lead to many logistics issues. Inputting the incorrect address, remote locations, and not being present at delivery are all cause for concern. These factors come into play in the accuracy of the delivery as well as costing valuable time and money.
Business to Business Vs. Business to Consumer
Large B2B deliveries are often handled and transported with B2C deliveries. This is an inefficient system built to save money but ends up costing more in the long run.
B2B shipments tend to be larger and more time-consuming than a 2-pound package from a retailer.
A delay in either delivery has repercussions. On one hand, a business needs the goods to avoid downtime or continue with production. On the other, medical supplies are also needed and could result in a serious health crisis.
Types of Goods Shipped
On occasion, the types of goods getting shipped can cause nightmares for a logistics company. Dangerous, toxic, and flammable goods must have safe handling. Fragile/breakable and perishable items also need extra planning.
As advanced we are as a nation, we still need to improve on the tech we do have. Inaccurate computer systems, GPS, and handhelds cause delays by failing to work when they’re called to.
Couple inefficient hardware with shaky software and it’s clear the logistics system as a whole can use some upgrading.
Drivers face longer travel times and inefficient routes when infrastructure is in poor shape or roads are in disrepair. While this isn’t the sole cause of the last mile problem in the U.S., it does add to it.
In international shipping, poor infrastructure affects deliveries the most.
What are the Solutions?
The good news is that logistics companies are always trying to find solutions and improve on current methods. These solutions fall on everyone involved
Retailers can affect change by reviewing their warehouse and fulfillment processes. Notification should keep customers in the loop as the shipment reaches checkpoints in the process.
Technology should improve so everyone in the chain has better knowledge of where their product is and when it’s expected to get delivered. Ordering software should have immediate error checks for incorrect addresses.
Put real-time visibility software in place so everyone in the chain can track shipments and catch inefficiencies.
Make routes more efficient. Inefficient routes cause poor time management and increased fuel costs. Optimizing routes to meet expectations is a realistic solution but takes more planning on management’s end.
Carriers need to figure out how to get the most deliveries out of a driver in the least amount of time. Variables such as delivery windows, location, and truck sizes and load need to get taken into consideration in the process.
The Final Goal
As you can see, last mile logistics are an important part of the shipping process. Some business owners believe it’s the most important part. But it’s also where the most mishaps can occur.
Choosing a carrier that understands the importance of last mile logistics is paramount for having your shipment arrive safe and on time. That’s where we come in.
Chicago Messenger handles freight around the world in a secure and dependable manner. We work 24 hours a day, 7 days a week, 365 days a year to make sure your cargo gets delivered on time.