Updated: Sep 9
With parcel shipment valued at more than $83 billion and projected to double within the next ten years, carriers of all sizes are identifying last-mile logistics as the cornerstone to drive that growth and profitability. Yet, last-mile shipping can be one of the most challenging parts of the supply chain. According to Investopedia, "'The last mile" is used to describe the short geographical segment of delivery of communication and media services or delivery of products to customers located in dense areas. Last-mile logistics tend to be complicated and costly to providers of goods and services who deliver to these areas.
It's no secret that we now live in an instant gratification society; our society wants everything yesterday, making order delivery both expensive and confusing. So, why is it essential for an e-commerce business to fully understand last-mile logistics?
What is the last-mile problem?
The rise of e-commerce in the US has led to a dramatic increase in parcel deliveries and heightened customer expectations. Customers are less likely to pay for shipping, with 62% of customers expecting the shipping on orders to be free and to arrive within 3 business days. While shipping costs are rising for various reasons, the last-mile accounts for 53% of shipping costs. Rural areas present the greatest last-mile delivery challenge, as delivery points are miles apart, and packages are only delivered one at a time. In cities, excessive traffic causes delays at the last mile as well. The development of modern shipping has also resulted in an expectation of visibility. The USPS has traditionally handled last-mile deliveries, while carriers like FedEx and UPS outsource to them, but consumer expectations of their delivery services are forcing carriers to regain responsibility for their last-mile shipping.
Traditionally, companies investing in e-commerce have invested in Transportation Management Systems (TMS). By automating asset tracking and generating alerts from both shippers and consumers, modern TMS can assist shippers in managing last-mile delivery. A shipping solution like DesktopShipper helps with tracking automation and connects companies to reliable carriers with integrations. Using DesktopShipper's real-time rate shopping feature allows you to rate shop and use your favorite carriers to ensure a successful last-mile shipping strategy. Tracking alerts improve visibility and reduce risk during last-mile delivery. Others have opted for nontraditional delivery methods to meet their customers' needs, which has had a positive effect on solving the last-mile issue. These have included:
Many companies use contracted delivery services such as Uber, Lyft, Shipt, and GrubHub to ship their last-mile deliveries. These services might not work for every company, but utilizing same-day delivery partnerships can help take inventory from brick-and-mortar stores and deliver it directly to their customer's doors.
Drones and Robots
Technology that enhances fast, automated, and contactless deliveries is at the forefront of innovation for last-mile delivery. Several carriers, like FedEx, have invested in electric delivery vans to help with energy consumption. While drones and robots have not become the standard in the industry due to regulations, more companies are exploring robots and drones to bring down the cost of deliveries while improving customer service. Get ready and stay involved in what is up and coming.
Route Optimization Technologies
Like TMS, e-commerce is growing fast, and newer and more innovative technologies are coming to help businesses save money. Keep an eye out for new ways to pivot and navigate consumer needs and trends.
#ShipTip: Shippers could also offer better incentives to truckers looking for career opportunities and positions with fewer regulations and rules.
It's no secret that consumers expect more out of companies. Thus, last-mile shipping could be considered among the most important aspects of shipping. Do not leave this last bit of the supply chain up to chance. By fully understanding it, an e-commerce business can successfully save time and money while delivering products to customers, no matter their location.