Last mile delivery is the final step in the supply chain, where goods are transported from a local hub to the customer’s doorstep. It is a critical factor in customer satisfaction and loyalty.
However, this stage often faces challenges such as high delivery costs, traffic congestion, and missed delivery windows, which can lead to increased expenses and unhappy customers.
Also, these issues can significantly impact a company's reputation and profitability.
But is there anything you can do about it? Absolutely Yes.
In this article, we’ll discuss the final mile delivery challenges in detail and explore effective solutions to streamline last mile delivery, ensuring a smoother and more reliable service.
Significant Challenges in Last Mile Delivery Logistics
Achieving a smooth last mile delivery is challenging due to several persistent issues.
Let’s explore some of the main challenges that complicate this final stage of the delivery process.
Best Route Estimate
Finding the best route estimate is hard because traffic can change suddenly due to accidents or jams, affecting how long it takes to travel.
Furthermore, road conditions, like construction or closures, and the distance between places also add to the difficulty, making it challenging to find the fastest and most efficient route.
To get it right, you need up-to-date information and smart algorithms to adjust to these changing factors.
Cost Management
Cost optimization in last-mile delivery is tough because you have to juggle multiple expenses, like fuel, labor, and vehicle acquisition, upkeep, all at once.
Each delivery route comes with its own set of challenges, from different customer locations to specific delivery times, making it hard to find a one-size-fits-all solution.
You need to keep deliveries on schedule while also keeping costs in check, which means constantly adjusting and planning carefully.
Environmental Impact
When scaling up or starting a new business, balancing environmental responsibility with cost-effectiveness and consumer demands can be challenging.
One specific problem is the increased carbon footprint and resource consumption associated with frequent, inefficient deliveries.
Frequent trips not only contribute to higher emissions but also increase operational costs.
Communication Issues
Communication and tracking issues in last-mile delivery often stem from a lack of real-time updates and coordination between delivery personnel and customers.
Without accurate tracking information, customers are left guessing their delivery's status, leading to frustration and missed deliveries.
Additionally, inefficient communication channels can cause delays if delivery personnel can't promptly address issues or get customer instructions.
This can result in a poor customer experience and increased operational costs for the delivery service.
Technical Issues
Technical issues can significantly worsen final mile delivery by disrupting operations and creating inefficiencies.
Problems with GPS tracking can lead to incorrect delivery routes or missed addresses, causing delays and increasing fuel consumption.
Malfunctioning delivery management systems may result in scheduling errors or poor communication between drivers and dispatchers, further exacerbating delays.
Complex Regional Limits
Navigating complex urban locations can be a limitation posed during last-mile logistics. This may be due to traffic, densely packed areas, and limited parking available.
When it comes to rural deliveries, there may be a lack of adequate transportation services and limited infrastructure.
Staff Training and Retaining
Training drivers in last-mile delivery to effectively use technology is a significant challenge. Many drivers may not be familiar with advanced delivery apps, or real-time tracking software, leading to errors in route planning and delivery updates.
Retention issues in last-mile delivery are compounded by the challenge of training drivers to use technology effectively. Even after investing time and resources into training, high turnover rates mean companies constantly need to train new staff, creating a cycle that strains operational efficiency.
Customer Expectations
Same-day and even same-hour delivery options offered by some websites and sellers significantly raise customer expectations, making them less willing to wait for their packages.
This pressure to deliver quickly drives up operational costs, as companies must hire additional labor, maintain larger fleets, and optimize routing in real-time to meet these tight deadlines.
Security of Assets
In final mile delivery, the challenge of securing assets like sensitive pharmaceuticals or high-value electronics stems from their specific handling requirements.
For instance, vaccines need strict temperature control, which must be maintained right up to the point of delivery.
This requires specialized equipment, such as refrigerated vans and insulated containers, as well as constant monitoring to ensure conditions are met. Similarly, high-value electronics demand extra security measures like discreet packaging and secure drop-off procedures to prevent theft.
Importance of Last Mile Logistics
There is a reason we say, “First impression is the last impression.” The final leg of a product's journey to the customer holds immense power in shaping brand perception. A positive last-mile experience can solidify customer loyalty, while a negative one can leave a lasting dislike.
Here are some statistics to prove the above statements:
In a survey, 98% of people agreed that delivery is important in building brand loyalty.
About 44% brands do not have delivery experience being positive as their first priority.
8 out of 10 people will not purchase from the same brand or company if their delivery experience was negative in any way.
About 68% of people look for shorter delivery periods to get the items at the earliest from online stores.
What can we infer from this data? Delivery experience in the last leg is paramount and shows the brand face to the customer no matter how much resources go into other areas.
When a business has a good last mile impact, it shows the following things:
Efficient operational cost
Positive customer experience
Successful deliveries in minimum attempts
On-time/ same-day deliveries
Transparent delivery process
No damage to the goods or theft
Diligent workforce while being cost efficient
Best Strategies for Efficient and Cost-Effective Delivery
For B2B businesses, deliveries can be large, bulky, or require specific handling. Similarly, for end consumers, the delivery experience has to be smooth and hassle-free despite the challenges.
There are a number of strategies that can ensure last-mile operations are efficient and cost-effective. We’ll discuss these in detail below.
Centralize All Logistics Data
Gaining an overall view of your delivery agents and services is crucial for optimizing the last mile. Implementing software that centralizes logistics data and provides real-time insights is the best idea.
It may include everything from order volume and driver availability to traffic patterns and weather conditions.
This centralized hub is a way to identify any hiccups and anticipate delays. As a result, it can help in making an informed decision for better delivery routes and resource allocation.
Route Optimization Software
Employ a route optimization software with advanced algorithms. There are options to include AI(Artificial Intelligence) and ML(Machine Learning) to create the most efficient delivery routes possible.
Route4Me is one of the most popular and widely used tools. It offers real-time traffic updates, weather conditions, and vehicle capacity management.
Route4Me's robust algorithms optimize delivery routes, taking into account various factors such as traffic patterns, forecasts, and road conditions.
Another notable tool is OptimoRoute, which also leverages AI and ML for this purpose.
The software works on factors like current traffic patterns, forecasts, and weather conditions.
This can reduce delivery times and fuel costs, minimizing workforce fatigue, and improving overall operational efficiency.
Multiple Fulfillment Centers
Your chances of delivering quickly and to several locations can be magnified by having multiple fulfillment centers that are close to the customers location.
Figure out the areas with the most orders and establish a center with less transportation distance and cost.
You can save money and time, while delivering the same day and same hour to the customers.
For instance, 3PL companies like Complete Storage and Logistics use multiple warehouses across Victoria and Tasmania to ensure efficient and speedy delivery.
This network reduces transit times and enhances delivery reliability by positioning inventory closer to customers.
Flexible Delivery Options
Customers like when they can pick up services as per their convenience and even get same-day deliveries. This is among the biggest selling points of some businesses. Offering flexible delivery options caters to diverse needs of whether someone works late nights or is on vacation.
Scheduled deliveries allow businesses to plan their workdays in advance. On the other hand, pick-up points at convenient locations provide B2B and consumer customers with greater control over the delivery process.
Use Data Analytics
Learning from the previous data is the best option in improving logistics and preventing issues that occur repeatedly. By using data analytics tools, businesses may gain valuable insights into delivery trends, identify areas for improvement, and optimize future delivery strategies.
They can easily study the data to analyze factors such as delivery times, customer feedback, and common challenges. In turn, this will lead to businesses pinpointing the problems and tailor solutions for a more efficient and cost-effective last-mile operation.
Communicate with Customers
Transparent communication with the customer via email, phone, messages and in-app notifications helps in building trust. Moreover, the ability to track the order and know about its status at any time gives the consumer a sense of relief.
Use platforms like Onfleet or Shippo that provide real-time tracking for both customers and delivery personnel.
They may be able to communicate availability better or be available at that time. Knowing when the package is coming and actually delivering at that time allows the customers to plan their day accordingly.
So, it will lead to minimizing missed deliveries and customer frustration.
Electronic Proof of Delivery (EPOD)
Accountability is essential in the last leg of the delivery. Getting online signatures, photos of the delivered items, and confirmation of handing over the parcel can be beneficial for both parties. Any claims made about the quality, damages, or missed deliveries will be easy to handle this way.
For example, by capturing a digital signature or image upon delivery confirmation, businesses can verify successful delivery and resolve any discrepancies quickly and efficiently. This simplifies record-keeping for B2B transactions and offers peace of mind for both businesses and their customers.
By implementing these strategies, businesses can transform their last-mile operations into a competitive advantage. From centralized data hubs and route optimization software to a motivated workforce and clear communication, these strategies empower businesses to deliver efficiently, cost-effectively, and exceed customer expectations in the crucial last mile.
Considerations for Implementing Last Mile Delivery Strategies
Now you know about the strategies that can make the last mile logistics cost effective and efficient while serving the consumers. Implementation of these strategies has to be done carefully. It includes understanding the customer expectations, employee needs and expanding the business. We’ll discuss these in detail.
Customer Feedback
Catering to customers is all about being flexible. Offer delivery options like different locations and smart lockers.
Allow customers to easily update their delivery address in case of changes, minimizing failed deliveries.
Collect honest feedback from the customers. Make sure it’s quick and engaging as people may not interact with feedback options for long on the delivery apps.
Delivery Fleet
Decide between using your own vehicles and partnering with 4PL providers. You may list the pros and cons of each one to pick the most economical and reliable option. Look for scalable options in case you need more resources at busier delivery seasons.
Managing Returns and Reschedules
Develop a clear and efficient returns policy to reduce hassle for customers as everyone likes quick resolutions to such issues.
Create a process for returns, including timelines, conditions, and instructions.
If the customer asks for rescheduling, offer the services for upcoming days.
Wrapping Up
So, these are strategies for efficient and cost-effective delivery.
Understanding the limitations in the process regarding transportation or using new technology is necessary when it comes to making the last leg efficient.
Analyzing the previous data, ample training, and catering to the customers are some steps to deal with last mile challenges.
Are you looking to update delivery services? Connect with Complete Storage and Logistics and explore final mile delivery options and the best 4PL Solutions.
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