National Courier Service | Same Day Delivery Management Specialist

 
 
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7 Trends in the Last Mile Carrier Industry

October 16, 2019 last mile logistics

9.84 billion parcels were distributed around the world in 2017.

The last mile delivery market is experiencing breakneck growth. A significant reason for this growth spurt is the rising volume of parcels which can be attributed to a high growth rate of the e-commerce business.

As more customers place orders, supply chain companies will need to find ways to fulfill them faster thereby differentiating themselves.

Thus, there is a need for every last mile carrier to pay attention to the trends in the industry and figure out how they can best serve their business.

Keep reading to find out some of the latest trends in last mile delivery.

1. The Gig Economy and Crowdsourcing

The advent of the gig economy (and consequently crowdsourcing) has led to the disruption of many industries and logistics isn’t an exception.

With the gig economy, the focus moves from seeking long term jobs to spying out short term contracts.

Combine this with the increasing desire for convenience from customers and you have inevitable disruption coming from the gig economy and crowdsourcing.

Large scale firms like Amazon and Postmates have taken note and are taking advantage of this workforce. These companies advertise new deliveries on their applications. Drivers can then fulfill that task and earn some money.

These services, however, do have some downsides to them at this nascent stage. They don’t cover as wide an area as traditional delivery does.

In fact, they mostly happen to operate around urban areas. As a result, the gig economy is still inefficient when dealing with final mile delivery.

Despite these challenges, you will only write off this trend at your own peril.

Expect it to play a more significant role in the future as economies of scale for gig economy platforms improve their convenience and geographical areas of operation.

2. Speed Is Now Critical for Any Last Mile Carrier

In previous years, last mile delivery companies that didn’t deliver as fast could somehow still survive.

The main reason for this being that as a whole, the industry had not made fast turnaround times something a customer could expect or rely upon.

Things completely changed when Amazon introduced same day and next day delivery services to the wider market. The company upended the industry by not only offering free shipping but also consistently delivering faster.

Inevitably, customers started to expect other last mile companies to deliver faster. Today, customers are willing to pay a 30% premium for same day delivery service.

Such customer demand is proof that speed will only become more crucial to a last mile company’s success.

3. Evolution of the Postal Service

The changing technological landscape has inevitably led to a sizeable decline in the volume of postal mail. On the other hand, parcel deliveries from e-commerce businesses have seen a significant uptick.

Legacy companies like the United States Postal Service (USPS) have taken notice and are now seeking a piece of the pie.

When a postal company like USPS adds a parcel to home delivery, the cost is incremental since the postman was still going to that same house.

For delivery firms like FedEx and UPS, adding that parcel comes at a higher cost as it is an independent stop.

The result is a resurgence of these legacy postal firms as customers use them for their last mile deliveries.

As their costs reduce, even more, customers will want to add more categories of products to the postal service delivery.

4. In House Delivery

Last mile logistics is the most expensive part of the distribution business. In a bid to reduce these costs, more companies are now bringing a portion of their last mile delivery services in-house.

Amazon, for example, now operates its own fleet of delivery planes in addition to those it uses from third-party delivery companies.

In this connection, some last mile delivery firms have taken the unusual approach of working in cooperation with their competitors.

Instead of competing, these cooperation deals seek to pool transportation assets so that it can be cheaper for every firm to deliver.

5. Warehouses in the City

Same day delivery offers a customer instant gratification that is hard for them to overlook the next time they place an order.

As more customers ask for same day delivery, businesses have noticed the benefits that come with offering this service.

To enable fast turnaround times and consistently deliver that instant gratification, businesses are opening up warehouses in urban areas. Where there are no pre-existing buildings, some are constructing them.

With Amazon having a big lead in offering two-hour deliveries, the trend will be for more firms to invest in urban warehouses to catch up.

6. Delivery Technology

Today’s customers have become used to tracking their order from when it starts shipping to when it arrives at their doorstep.

A secondary application that arises out of this technology is the ability to monitor other factors that affect the quality of a parcel.

If a customer places an order for pharmaceutical drugs, for example, they can add sensors to the package which will relay its real-time temperature throughout the journey.

Companies are also using weather prediction analytics tools so that they can best plan their delivery routes and avoid wastage.

7. Delivery by Autonomous Vehicles

Technology today has advanced enough to help businesses begin creating ways around factors limiting the supply chain like the cost of labor and its availability.

Using self-driving cars and delivery drones, logistics companies can eliminate the need to employ drivers in their fleet. In addition, they can be able to guarantee 24-hour delivery no matter the location.

However, tests are ongoing to smoothen delivery by autonomous vehicles; it will take some time to become mainstream.

Regulations need to be created to govern this development but it is safe to say that this is a trend worth watching.

Stay Ahead of the Curve

The last mile delivery industry is living in exciting times. A boom from e-commerce is increasing the total volume of parcels slated for delivery.

As customers grow to expect instant gratification in parcel delivery, every last mile carrier will need to innovate to stay competitive. Therefore, they should study industry trends and see how they can add value to their operations.

Need It Now has over 30 years of experience in the industry and is one of the most reliable firms in local and international deliveries. Click here to get a free quote today.

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How to Solve the Challenges of Last Mile Logistics

September 11, 2018 Courierlast mile logistics

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 Input

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.

Inefficient Technology

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.

Poor Infrastructure

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.

Check out all our freight services or contact us today for your free quote.