The transportation process from the fulfillment center to the customer’s doorstep is called last-mile delivery. Last Mile Logistics is another term. Its mission is to deliver goods quickly, affordably, and consistently. Companies like Amazon have transformed online retail distribution through last-mile logistics, but that transformation comes at a price. Last-mile delivery presents challenges, costs, and other problems as product delivery accounts for more than half of delivery costs and delivery truck routes are complex. Learn more about last-mile delivery and how it impacts retailers.
When orders and requests are placed into the system, the last-mile delivery procedure begins. These orders may come from a variety of sources, including e-commerce marketplaces and fulfillment facilities. A tracking number is generated and tracked by the sender and recipient.
Orders are usually picked up from the supplier and delivered to the transportation hub, where companies must ensure that the parcels are delivered to the customers as soon as possible.
Following that, orders are sorted and assigned to delivery workers depending on routes and recipient addresses.
Companies frequently use several sorts of automation to assist them with this phase, such as carousels, conveyor belts, and other robotics.
They must also guarantee that sorting and designating are done strategically in order for their last-mile delivery solutions to be effective and cost-effective.
The items are put into vans and dispatched for delivery after they have been scanned.
The parcels are scanned to inform the sender and recipient of the status of their orders. It also makes tracing the goods easier in the event that they go missing.
When the parcel is delivered, the delivery personnel updates the tracking information and confirms that the delivery was successful.
Advances in online shopping have changed the way modern customers acquire items. In particular, the move to online grocery and meal packages has changed the way the average person shop for groceries. The refrigerated transportation industry is changing as consumers demand home delivery services. Consumer demand has created a new market for cold chain logistics providers.
Refrigerated trucks have become an important part of the food supply chain as more people need fresh produce and home delivery services. See how refrigerated transportation has evolved to meet the growing demand for home delivery services.
Route planning is the most effective way to ensure successful transportation. Deploying more sophisticated systems to monitor the condition of refrigerated trucks and other small refrigerated trucks on the route is a common solution for refrigerated logistics carriers.
With consumer schedules having a huge impact on couriers, refrigerated delivery is an essential technology for staying prepared. For example, if a vehicle breaks down while transporting perishable goods, a system that tracks and monitors perishable goods can alert another vehicle in the fleet to stop work.
The most effective refrigerated transportation systems contain responsive and configurable mechanisms that support the logistics flow. If the first delivery attempt fails, the carrier’s logistics system must reroute another vehicle and notify the customer of the change within the original timeframe.
With the increase in home delivery demand, the turn cycle of refrigerated food inventory is also increasing. Refrigerated transportation must evolve to meet domestic demand. Consumers are demanding fresh food over frozen food, requiring significant adjustments in the facilities that ship these products.
Warehouses are often used by logistics companies as destinations for refrigerated shipments. Providers must maintain an end-to-end cold chain and last-mile refrigerated delivery to consumers for home delivery.
Despite some swings in demand, the COVID-19 epidemic has only spurred eCommerce expansion. According to Adobe Analytics data, eCommerce sales were up 55% year on year for the first seven months of the year, totaling $434.5 billion in online spending. Adobe Analytics also predicted that by October 5, 2020, total online sales in 2020 would surpass total online sales in 2019.
Much of this spending can be linked to the fact that many consumers used retail therapy to relieve pandemic-induced worry, particularly during the initial stay-at-home orders. Add to that the fact that non-essential stores were closed for an extended period of time, rendering in-person purchasing unfeasible, and it’s simple to see why eCommerce became so popular. Although the volume of eCommerce sales has decreased as more businesses reopened, COVID-19 has clearly established a new normal in terms of consumer purchasing patterns and last-mile delivery expectations.
The average speed of product delivery is subject to local road and traffic conditions. Route disruption, especially in urban areas, has a significant impact on fleet average speed and fuel efficiency.
Distance and drop size varies substantially between delivery places. Customers may be located hundreds of kilometers apart, with only one or two things delivered to each site. Drop-off points may be closer together in urban areas, but they are more prone to traffic congestion and delays.
As e-commerce has grown, the volume of deliveries has increased at an exponential rate, adding to the complexity and amplifying inefficiencies.
Delivery of goods to fulfillment centers or chain partners does not carry the same risks as delivery to customers. Delivery failures, especially e-commerce deliveries, need priority. Otherwise, the result will be expensive.
When people are neither at home nor at the final location to take delivery, deliveries fail. Failed deliveries are costly in terms of time, energy, and resources. Business customers cannot always accept deliveries outside of agreed-upon time frames or without appointments.
Customers complain and are inclined to transfer their business elsewhere when delivery is late. When deliveries do arrive on time, consumers are rarely informed of when to expect their package, which causes frustration.
Last-mile delivery has increased average return rates and created new problems for e-commerce processing. If a retailer sells online, returns should be accounted for in the logistics. Last-mile delivery is subject to returns, refunds, and additional discounts on exchanged items.
Reverse logistics contributes significantly to last-mile expenses; the number of product returns is increasing, particularly in textiles, books, and electronics.
The likelihood of a buyer returning an item purchased online is roughly 30%, compared to 8-9% in physical locations. The final mile logistics will continue as usual but will be repeated in reverse order, tripling the cost. To reduce the number of journeys, many merchants use third parties to collect and batch their returns.
According to 59% of US transportation and logistics organizations, last-mile delivery is the most inefficient procedure in the whole supply chain.
Let’s take a look at some strategies for optimizing last-mile delivery for your business:
BOPIS is an abbreviation for Buy Online, Pick-Up In Store. The BOPIS technique, often known as ‘click and collect,’ is popular because it combines online purchases with in-person pickup.
Instead of worrying about last-mile delivery fees and shipment times, customers may pick up their items for free and at their leisure. It’s also beneficial to retailers.
Route planning is the process of devising cost-effective routes from one site to another. Because it is difficult to compute ideal routes manually, route planning software solutions that incorporate numerous inputs are utilized to discover the best delivery routes.
To minimize driving time and fuel consumption, they consider customer delivery windows, truck capacity, traffic congestion, and even weather. Using real-time warnings, drivers are directed to follow the most efficient route feasible.
To discover inefficiencies and waste, route planning software analyzes past data such as the number of successful and failed deliveries, idle time, distance traveled, time per delivery, and fuel consumed. Routes prepared in advance can lower the number of dispatchers required as well as the number of essential drivers, both of which save money.
No matter how good your supply chain is, there is always the possibility that a package will not reach the consumer. Proof of Delivery (POD) indicates that the shipment was received in excellent condition by the customer.
POD can be done in digital or paper way. Implementing Proof of Delivery options is a good way to reduce returns and save money.
Crowdsourcing is a new method of last-mile delivery. Stores that crowdsource delivery services hire contractors to deliver packages. Using their own vehicles, drivers pick up and deliver packages to your customers from your warehouse or order fulfillment center. Data shows that 8% of retailers already use crowdsourced delivery partners, and one-in-four plan to use them in the future.
Offering local delivery services is another strategy to maximize last-mile delivery. When a customer places an order on your website, a representative from your store will deliver it to their door. It has grown in popularity as an alternative to working with 3PLs or traditional couriers such as FedEx or USPS.
Retailers ranging from clothing stores to ice cream parlors can offer local delivery, setting their own times and minimums to ensure profitable deliveries.