With the significant increase in online shopping and e-commerce platforms in the past few years, businesses are investing more in the demands of their customers. One of the key areas of enhancing service is shortening the last mile delivery time because customers want their purchase as soon as possible.
Now that there is more demand for same-day delivery, companies spend up to 50% of the shipping costs just for the final mile delivery. This article discusses this in detail, including how to solve its problems and how to improve it to enhance customers’ experience.
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Part 1. What is Last Mile Delivery?
Last mile delivery is the final leg in the supply chain distribution channel, starting from purchase, manufacturing, and shipping to warehouses and the customer’s house. It is the process of delivering the goods from the warehouse to a customer’s home through a delivery truck or dispatch to a distribution center.
If it is delivered to the house, the product is first loaded onto a truck from the warehouse, and the customer gets it. Sometimes, it can be delivered to the distribution center and then to the customer.
Sometimes, it is delivered to a nearby collection center at the customer’s request, where the customer can collect it.
Part 2. Why We Need Last Mile Delivery?
The following are a few reasons why last-mile delivery is critical for not just the customers but also for the supply chain.
1. Customer Satisfaction
The more efficient the final mile delivery, the better the customer’s experience. As it is the final touchpoint for any retailer’s impact on the customer, the business will enhance if the customer is satisfied.
2. Competitive Advantage
You can better distinguish yourself from your competitors if you are more reliable and faster and provide different options to your customers. Same-day or next-day delivery is now more common, and customers are more used to it.
3. Business Efficiency for Reduced Costs
It costs almost 50% of the total shipping costs; if that isn’t managed correctly, you cannot thrive. Hence, streamlining the process is a given, minimizing aspects such as fuel, delivery time, delivery density, etc.
4. Managing Inventory
The more streamlined your last mile delivery leg is, the better you manage your inventory. Companies now ensure minimum inventory levels at all times. Real-time tracking is essential in cases other than limited stocks or items.
5. Urbanization and E-commerce
With rising urbanization, people prefer shopping online, allowing for the rapid growth of e-commerce businesses. To stay in the competition, streamlining last mile delivery is critical. Therefore, customers warrant reliable, timely delivery systems.
6. Returns and Exchanges
More and more companies are now allowing returns or exchanges, which can be for many reasons. With enhanced supply chain routes and practices, managing the final mile delivery is much easier, as customers don’t have to wait weeks for a return.
7. Flexibility
With streamlined last mile delivery, customers have more options, such as curbside pickup, collection centers, and doorstep pickup.
Part 3. Top 3 Last Mile Delivery Providers in the US
Customers are more informed than ever and hence want the most positive experience, which, if they don’t get from one provider, they will move on to the next. So, keeping your customers’ expectations is paramount. Here are three top last mile delivery providers, in no particular order.
1. Onfleet
If you are looking for leaner operations with services designed for the last mile delivery wow factor, Onfleet has been making great strides.
The company is well known for improved route optimization, providing auto dispatching, electronic proof of delivery, and many other features.
2. United Parcel Service UPS
One of the longest in the business, UPS is big on last mile delivery and provides many more supply chain solutions for companies. UPS thrives in bulk packages, especially if they are tagged fragile.
So, if you want API integration, smooth return policies, superb delivery even on weekends, and more, UPS is your service. They have even included drone delivery for city-wide delivery points, adding cutting-edge technologies to enhance customers’ experience.
Finally, they are also huge for delivering your package from international destinations and ensuring you get the right product.
3. FedEx
Another long-term serving company in the distribution sector, FedEx, has been with us since the 1970s and is well known for its international shipping at its best. To cater to customers’ demands, such as final mile delivery, among many others, they have invested heavily in cutting-edge technologies. AI and transportation supported by computer aids are just some of these technologies.
So, if you want to enhance your last mile delivery and ensure your customer is satisfied, you still would want to pay the additional fees to make it happen. Any company that wants efficiency and customer satisfaction at the core of its business will reap benefits by utilizing FedEx’s services.
Part 4. What is the Last Mile Delivery Problem?
If your last mile delivery process isn’t efficient, your delivery cost can increase significantly. Here are a few critical problems in last mile delivery.
Final Mile Delivery Costs – If you don’t have enough sales, you still have to pay to deliver the package to your customer the next day or the same day. Otherwise, your customer might move on.
Lack of Transparency—Many companies that cannot afford good solutions cannot provide their customers with ready-to-access information, such as their delivery status.
Failed Deliveries – This is most common in COD or curbside deliveries where the address isn’t correct or the supplier is inexperienced. The delivery is returned to the warehouse or online shop in these cases.
Lack of Routes and its Optimization – As a shop, you have subscribed to a logistics company that doesn’t have enough routes. You then have to hire another company to make the last leg, increasing your delivery costs.
Unpredictability—For some of the reasons just mentioned, timely delivery is not possible. This causes uncertainty for customers, as they don’t know when they will receive their product.
Part 5. How to Improve Your Last Mile Delivery?
Here are a few strategies to improve your last mile delivery.
1. Route Optimization
With the latest route optimization software, you can enhance your delivery fulfillment because it takes into account a few critical things:
- Which areas are prone to more traffic jams?
- Which routes are taken less and can increase efficiency?
- Delivery windows are where there is either less traffic or easier to meet the customer.
- Locations close to the warehouse or have a density of deliveries on a particular day.
2. Dispatching Automation
If you still use manual driver assignments for daily deliveries, you are working with outdated data. AI machine learning and an automated dispatch system can help you optimize not just your routes but also improve priority-based shipping. This helps the logistics company deliver more with less time spent on the road.
3. Work with 3PL
To improve your last mile delivery efficiency, you need a 3PL partner to provide you with the following services at a cheaper rate.
Intelligent Channel Planning – Recommends a faster route to your destination, even for future orders.
Automated Order Management—Every order on your platform is synced with their system, whether picking, packing, or shipping. Last mile delivery is incomplete if you don’t streamline the process, thus enhancing customer satisfaction.
Real-Time Order Tracking—As soon as the 3PL takes an order, every step and information are pushed out to the customers. You can track such information right from the dashboard and don’t have to use any other app. In case of any issue or discrepancy, you will be notified immediately.
Efficient Multi-platform Management – With a single click, you can sign into all your stores and manage them from a single portal, helping you see the bigger picture.
NextSmartShip provides all of these facilities and more if you use its services, which include many warehouses not just in the US but worldwide.
Conclusion
final mile delivery is essential for any e-commerce business to grow, even if they spend most of their shipping costs on it. If you can analyze it properly using a tool or software, you can save money and enhance your user experience. To help you with that, we shared a detailed analysis in this article by mentioning some problems you can overcome.The best option is to focus on your business and let an experienced 3PL company like NextSmartShip manage your last mile delivery logistics. You get the best services at the most affordable rates. Visit NextSmartShip today and observe how they can give you the best standard and express shipping rates.
