Last mile logistics is driving the growth of e-commerce
E-commerce companies have seen a huge increase in orders during the pandemic due to restrictions on brick-and-mortar stores. Because of these deliveries, concern and interest in faster deliveries and safer handling of products has increased.
Because of this, a term that has become increasingly popular in recent years is last-mile delivery, which is not just a marketing gimmick to attract customers, but a real need for both e-commerce giants and small e-commerce businesses.
According to Accenture, 89% of retail, manufacturing and logistics companies believe that e-commerce creates a greater need for faster deliveries. It is this demand that drives the concept of last-mile delivery and promotes solutions such as same-day deliveries.
What is last mile logistics?
Last mile logistics, or delivery, refers to the last step in the delivery process from the distribution center or warehouse to the end user. As the name suggests, it is the last part of the delivery, which can vary from a few blocks to 160 km, depending on the distance between the parts. Most of the time, last mile logistics involves the use of small carriers to deliver goods to consumers.
According to a MasterCard report, parcel shipments will grow by US$900 billion in 2020, and between 20% and 30% of that growth is expected to be permanent for the sector. In addition, logistics companies of all sizes have recognized last-mile logistics as the foundation for growth and profitability.
Why is this an important process for companies?
The entire process of producing products and making them available to customers depends on last mile delivery. First mile and half mile delivery is back-end and does not deal directly with consumers. Last mile delivery is the part that communicates with the customer.
Now, if we remove last mile delivery from the process, consumers have to physically pick up their orders at a store or distribution center. Therefore, the buyer must pay for the product and the costs of transportation to the seller.
In addition to costs, there may be issues such as delays, product handling, item tracking, and shipping damage that must be borne by the customer. With last mile delivery, customers can get the product delivered to their door and track all transit activities.
What are the benefits of the last mile for the supply chain?
During the boom of the Internet economy, it has become clearer than ever that for small and medium-sized enterprises (SMEs), the last mile is an essential tool for survival and growth. The possibility of delivery to the customer’s home address creates an advantage in a highly competitive environment and guarantees the quality and safety of the process from the moment the product leaves the warehouse to the end consumer.
Advantages of last mile logistics in the distribution chain
- Reduces operating costs. Technology and algorithms specializing in shipments with efficient delivery services reduce logistics costs by up to 40%, according to Borzo (formerly Click Delivery), an express delivery startup;
- Optimization of delivery time for the end customer;
- On-demand delivery that can be delivered to private homes or business premises;
- Improves user experience using real-time geolocation, route optimization and service customization;
- Increased quality and variety in the mode of transportation. It is possible to use from trucks and vans to faster and lighter solutions, such as motorcycles.
Last mile delivery management
Individual delivery management can become a challenge without productive tools and infrastructure. For example, if you are delivering to more remote areas as well as rural areas, you may not always have adequate GPS maps or a phone signal, which presents a logistical challenge.
This is where you’ll need smart delivery management software that can help automate delivery allocation and order management, among other things. There are logistics companies that help in automatically assigning individual delivery orders to the delivery team based on location, time and route to minimize delays.
Last mile tracking
When you focus on faster individual deliveries, tracking the last mail takes center stage. Tracking allows companies to optimize routes and ensure faster deliveries. Especially for urban areas, avoiding traffic jams and getting to the customer’s location are key.
Let’s take the example of food delivery. If you are going to serve hot and fresh food to your customers, last mile mail tracking is essential for a better customer experience. Approximately 66% of customers stop shopping in e-commerce after two late delivery experiences. Hence, delivery tracking becomes very important.
For a small e-commerce business, last-mile access is critical to day-to-day operations. Deliveries can be broken down into smaller units for better management than a bulk approach. Additionally, there are several challenges to the last mile delivery system that can be turned into opportunities with the right kind of technology solutions.
Also Read: Challenges, Opportunities and Technology in the Last Mile Delivery Industry