Optimizing Last Mile Delivery

As the final step of the distribution process, last mile delivery can make or break customer experience and business success. Efficient last mile operations are crucial to ensure timely, dependable, and convenient deliveries. 

Consumers want fast, hassle-free delivery that they can track to know exactly when their package is going to arrive. Last mile delivery is what we call this final portion of the delivery process, when packages are transported from a fulfillment center of some sort to the customer’s home. This final step of delivery is critical because it directly impacts customer satisfaction and retention. It’s worth noting that 84% of consumers say they are reluctant to shop with a brand again if they have a negative delivery experience.

Challenges of Last Mile Delivery

High Costs

Last mile delivery is a significant portion of shipping costs, with about 50% of costs related to the final leg of delivery. Consumers don’t want to pay more, even if it means they will get their item faster. Factor in returns, delays, and cancellations and the costs add up quickly. 

Operational Inefficiency 

Businesses need to develop efficient frameworks to maintain and manage orders, execute return order management, and ensure uninterrupted supply chain flow when unexpected obstacles arise. Without the right technology or a 3PL to help, it can be difficult to manage the operational aspect of multiple deliveries in the final distribution stage. 

Poor Route Optimization

Well thought out route planning is vital for seamless last mile delivery. Manual mapping takes too long, and inaccurate mapping due to manual planning can be costly. It is impossible to combat traffic or bad weather conditions, so it is important to use predictive analytics to get the best possible route. Predictive analytics use historical and real-time data to offer insights that can help anticipate potential events.

Delayed Deliveries

Consumers want their products quickly, so a delayed delivery can derail the entire customer experience. Late deliveries are an inconvenience to the customer than can make them unlikely to purchase from the retailer again. Without streamlined processes and a dedicated workforce, providers will struggle to meet the rising demand for quick, efficient, and reliable delivery. 

Lack of Real-Time Tracking and Transparency 

It is important for logistics providers and brands alike to be aware of where the drivers and packages are at all times. Customers also demand to be provided with real-time updates so they can know when their package will be arriving. Last minute changes can lead to disappointment, but providing instant updates can assist with transparency and customer experience. 

How do I overcome the last mile delivery challenges?

Warehouse Proximity

This one might seem simple, but can assist greatly with the final step of distribution. Ensure that products are being stored in a warehouse that is as close as possible to your end consumers. This helps minimize delivery times, cost, and fuel usage. 

Invest in Technology

There are new technologies that are capable of analyzing real-time information, leading to better decision making. These predictive analytics can lead to lower operational costs and more efficient routes for multiple addresses in one go. Along with planned, effective routes, it is also important to allow for dynamic routing. Technology can help to analyze parameters like time, location, traffic, and weather in real-time in order to recommend the best possible route. 

High Level Customer Communication

Using the technologies mentioned above, over-communicating with customers instantly as delivery updates are available can greatly improve customer satisfaction. Consumers want to know where their package is, if they will be home when it is delivered, and what happened to delay the package if it didn’t arrive on time. 

By optimizing last mile delivery, companies can provide a superior customer experience that leads to customer loyalty and increased revenue. Real-time tracking, improved routing, transparent communication systems, and flexible delivery options allow companies to turn the challenge of “the last mile” into an opportunity for growth. 

Read more about predictive analytics and the other technologies that could affect the future of the logistics industry.