What Is Last Mile Delivery? How It Impacts Overall Logistics?

Consumers’ shopping habits have evolved, notably when it comes to internet purchases. Consumers of today demand quick, inexpensive, or even free delivery. Therefore, to fund their shipping operations, businesses must find a means to increase efficiency and reduce costs to remain competitive.

This mostly comes down to how a business handles last-mile deliveries. This implies that for a business to succeed in this market, it must discover ways to increase its level of efficiency.

In this post, we’ll examine the difficulties of last-mile delivery in great detail, identify the greatest issues you’ll encounter with last-mile deliveries in the future, and talk about how technology may be utilized to address them and offer your business a competitive edge.

What Is Last Mile Delivery?

 The term “last mile delivery” describes the last stage of the delivery process, when a package is transferred from a major port to its final location, typically a person’s home or business. According to a study, the last mile delivery market will hit a record of $200.42 billion by 2027. 

Businesses want to ensure that this crucial stage is completed as quickly and efficiently as possible because it is the most important one in the delivery process. This is done to meet rising customer demand for quick shipment, particularly in the e-commerce, agricultural, and retail sectors. In addition, it is the most expensive part of the route that commodities follow to get to their final location.

What Is Last-Mile Delivery Software?

The last mile is the most significant yet time- and money-consuming part of transportation. The fastest delivery of the package to the consumer is its main goal.

Customer satisfaction is also said to be largely dependent on the last mile. It may help businesses save money and run more smoothly when done correctly.

Businesses may increase the profitability of their last-mile delivery by using last-mile delivery software, which has a variety of capabilities. Additionally, it will improve overall corporate processes and increase client loyalty.

Last-mile delivery software is the best option for businesses looking to enhance the client experience.

The Most Common Features of Last-Mile Delivery Software Are

Software for last-mile delivery often has the following features:

• planning a route,
• work delegation, and management (auto-dispatch)
• real-time alerts and status updates
• fleet analytics
• Digital proof of delivery reports
• live to monitor

5 Key Steps in The Last Mile Delivery Process

 The following five phases can be used to break down the last mile delivery process.

1. Digital Entry of Orders Into a Centralized System

Orders and requests are now being watched over by the sender and the end user, who is probably keeping track of the delivery through a tracking number.

2. Orders Are Delivered to The Transportation Hub, Where They Wait to Be Delivered to Their Intended Recipients.

Businesses need to make sure the order gets from the transportation hub to the client as fast as possible since here is when the last mile delivery process starts.

3. Delivery Employees Are Assigned Orders Depending on Routes and Recipient Addresses.

Strategically sorting and designating the goods for delivery is vital to efficient, cost-effective delivery. You can divide your entire chain of fleet and delivery person into different groups according to the areas they will serve. Assign the orders based on the delivery addresses and the routes.

4. Select Futuristic Technologies

Speaking of technology, companies who want to control their last mile logistics must choose solutions that let them link and digitize every stage of that process. They won’t be able to deliver the ease customers want while still delivering effective, affordable procedures that support a good ROI until then.

Several futuristic technologies can help improve the operations and efficiency of a last-mile delivery system. For example, you can incorporate telematics to monitor your fleet based on GPS, OBD, or onboard diagnostics. The mapping will be done using computerized software that makes identification much easier.

Predictive analysis is another technology that can help your last-mile delivery business to become more productive. Extracting data from current endpoints and using artificial intelligence and machine learning models to find the patterns will help you predict the outcomes for a given set of inputs.

5. Adopt a Method of Progressive Scaling.

Businesses that aspire to see long-term growth must scale. Before scaling out a delivery-related technology or updating to a national or chain-wide offering, businesses must first test them in real-world settings at only a few stores or locations.

Today’s consumers frequently place greater importance on the perfect delivery experience than on whether or not they are happy with the product they got. Given this, it should come as no surprise that how companies handle their last-mile logistics now determines a portion of their market share. Those who want to stand out must provide excellent delivery experiences based on a tried-and-true method of controlling their last mile logistics.

What Is the Biggest Challenge with Last-Mile Deliveries?

The last mile delivery forms the most crucial part of the entire business. Most businesses in this industry need to improve their delivery networks and channels, taking the operations to the next level. It is only then they will be able to meet the market demands and keep their customer satisfied.

You had to send the delivery to six customers, starting from 11 in the morning. If the first delivery is done at 2 in the afternoon, all five deliveries will get delayed. Six of them will complain about receiving the deliveries delayed.

That’s why it’s always better to know the challenges most businesses face for the last mile delivery to make your business immune to all these threats and crises.

1. Consumer Behavior

79.8% of people love to buy from Amazon due to fast deliveries and shipping. People always love to have things in their position at the earliest. No matter where they’re living or what kind of thing they have ordered, their innate wish is to get things delivered to their place within the least possible time. Maintaining such speed and meeting customer expectations is not easy, especially when there are many challenges one must face. Therefore, every business needs to learn ways to tackle the unexpected expectations of consumers concerning delivery speed.

2. Obsolete Technology

You will face delays and missed deadlines if your delivery business doesn’t incorporate modern technologies. If you don’t use inventory and logistic software, you must appoint human resources to note down records. Let’s consider a warehouse where orders will be sent for logistics. 

This will further increase the chances of errors and delay the entire process. Therefore, automating the inventory and logistic management processes through software will be more beneficial because every task will be handled automatically without human interference.

3. Higher Last-Mile Delivery Cost

A report showed the delivery cost for B2B businesses is approximately $6 per cubic meter per delivery. This average number depends on the industry, the distance between the warehouse and the delivery point, method of transit, challenges to be faced on the routes, and so on. 

Therefore, most delivery businesses face the last mile delivery challenges in the form of higher costs. Unless they cut down the costs, they can’t streamline their processes and ensure all the parcels are delivered on time without further problems.

4. Lack of Transparency

The lack of transparency in last-mile delivery processes is another reason businesses suffer many consequences. Businesses must satisfy customers that the deliveries are packed and that no manipulation has occurred from their end. If they fail to deliver the parcel on time, customers will think their parcels are manipulated. If you do not bring transparency to your business, achieving the best delivery system is impossible.

5. Optimization of Delivery Routes

Many businesses in the last mile delivery system failed to offer enhanced user experience because of a lack of optimization in the delivery routes. For example, when the routes are not mapped properly, especially the alternate ones, drivers have to stick to what they have been given. It might cause delays because of traffic, poor road conditions, lack of knowledge about the directions, nonfunctional GPS, etc. 

This is why it has become mandatory for most businesses to optimize the delivery routes and ensure all drivers have at least two to three alternate routes. Besides this, GPS with multiple devices is also necessary because drivers can know the directions on time.

5 Ways Technology Can Solve Your Biggest Challenges

You will be amazed that 88% of customers are ready to pay additional fees to get same-day deliveries. Therefore you must optimize your last mail delivery business and ace the competition perfectly. However, it is not possible until and unless you incorporate appropriate technologies.

Technologies will help streamline the entire process and reduce the load and options of errors. For example, automating the logistic record update system will reduce human interference and errors in the records. Most businesses nowadays use inventory and stock management software because it can speed up the entire process and significantly reduce the chances of data mismatch.

Therefore, when you have the option of including technology in your last-mile delivery business, you should make the best out of it. There are several types of technologies that you can include, some of which have been described in the below section.

1. Mapping The Routes Through GPS

Have you ever wondered why Uber has become such a popular company by providing cab services? Out of the many reasons, the one reason that will help you understand why GPS is important for deliveries is the timely services of the fleet and knowledge of the routes. GPS offers a direct insight into the position of any vehicle; you should make the most out of this technology. 

Until and unless your drivers know what path to follow, it is next to impossible to reach their destinations on time. They will waste time searching for the best route possible, ending up in a whirlwind. Therefore, you should ensure that your drivers are connected with you through the GPS and that all the roots are mapped properly, showing the amount of traffic.

2. Big Data and Predictive Analysis for Route Optimization

Route optimization is a process through which data will be collected from real-time statistics about different routes, and analysis will be processed. Based on the inputs, analysts will draw information about the most cost-effective route, fuel-efficient route, fastest route, and so on. Big data and predictive analysis are the two most important technologies. 

Big data refers to the huge amount of unstructured data extracted from different endpoints about various routes and related aspects. Predictive analysis is a process through which patterns and trends are analyzed in the collected data and further used with AI models to get the most accurate output about different route statistics. 

Therefore, you can easily understand which route will cause less cost, less fuel consumption, faster deliveries, etc.

3. Auto Dispatch Technologies

Order batches are an excellent idea to reduce the overall time needed to make the deliveries. However, most businesses do not have this kind of technological platform through which they can order the batches to be delivered. As a result, they have to manually dispatch the orders, especially those with huge volumes, causing delays in the entire delivery process. 

However, if appropriate auto dispatch technology is integrated with the shipping and logistics processes, the time spent on batch orders can be reduced significantly. Without human intervention, the chances of mistakes will also get reduced.

4. Incorporation of IoT-Enabled Sensors.

The IoT enables sensors to work closely with multiple appliances over the Internet and allows people to track and record everything from remote locations. For example, if you have to deliver electronic goods on the same day to different parts of the country, you can attach the sensors to each parcel. Now, you will have an instant connection with the fleet, tracking their location appropriately and checking if the deliveries are going as per the expected plans or not.

5. Real-Time Tracking of Fleet

You have GPS, integrated sensor systems, and several other technologies through which location tracking and route tracking are possible. With the help of these accumulated technologies, you can easily know where your fleet is and if they are on time or not. 

If any driver gets stuck in traffic, and there is no way out until and unless the signal is green, you can notify your customers about delayed deliveries due to traffic problems. Similarly, if the weather is very bad and it’s raining, send a push notification to all the customers about the delays in deliveries because of heavy rain.

What Are the Costs of Last-Mile Delivery?

The fulfillment chain’s last mile logistics is unquestionably the most expensive link, costing $10.1 on average for every box delivered. To compensate for these expenses, firms often charge customers $8.08, deducting the remaining amount from the profitability of the goods they sell.

These figures represent tiny packages rather than massive cargo because most deliveries are small goods. Larger products like freezers, ovens, and other induction cooktops may require a final mile delivery charge of up to $50 per box.

A delivery driver makes $15.69 an hour on average. However, if you don’t have scale on your side, managing last-mile deliveries can be pricey, even if you just handle smaller shipments. You must also account for additional expenses.

You may soon feel the agony of the last mile delivery issue if you’re losing $2 (at the very least) on each delivery. These figures make it obvious that drivers must average many deliveries each hour to maintain your company’s growth.

Technology Solutions to Improve Last Mile Logistics

E-commerce is expanding faster than ever, which has resulted in a rapid increase in demand for quick delivery services. As a result, many businesses are struggling to meet the same last-mile delivery criteria as corporations like Amazon. However, companies may employ technology to maintain pace and provide last-mile logistics a competitive edge.

1. Real-Time Mapping and Tracking

Customers of today need accurate tracking information for every item they acquire online. Real-time tracking will be essential for any business depending on e-commerce to survive the epidemic. Innovative Internet of Things (IoT) gadget usage enables cutting-edge tracking.

For the tracker to report real-time statistics, there must be a reliable internet connection. Delivery cars may be tracked using IoT trackers as they travel their last-mile journeys. Businesses may monitor gasoline usage and delivery time to find strategies to save fuel expenditures.

The advantages of real-time tracking for shipments and delivery trucks extend to businesses and clients. Inefficiencies in the final mile and performance bottlenecks can be found using data gathered throughout the tracking phase. For instance, certain routes could experience larger delays than others.

2. Customer Service Models Utilizing Artificial Intelligence (ai)

Consumers will want more from companies after the epidemic than simple chatbots, particularly regarding their goods. Regardless of the size or scope of their workforce, organizations may satisfy last-mile requirements with the aid of AI models designed for customer service.

Today’s AIs can speak and comprehend natively spoken and written English thanks to machine learning (ML) and natural language processing. This enables an AI to cover a customer support team’s shortcomings and potentially speed up last-mile query response times.

For instance, throughout the supply chain, AI models are being used to deliver 24/7 shipment information. Customers can even speak to their smart speaker to inquire about the status of their deliveries, and the AI will respond appropriately.

Due to the 24/7 operation of last-mile activities, midnight delivery routes that might reduce traffic are made possible. Even last-mile delivery staff may use an AI assistant to navigate routes and handle on-the-job problems.

3. Self-Driving Vehicles

Autonomous vehicles are developing at the ideal time since driverless semi-trucks are passing road testing. For instance, autonomous trucking firm TuSimple successfully conducted the first fully driverless road test of its semi-truck without the assistance of a person in December 2021.

According to delivery service provider Street Fleet, juggling staff safety with stringent delivery requirements is one of the main worries concerning the final mile during the epidemic. Autonomous vehicles may enable businesses to prosper while striking a balance.

Autonomous delivery trucks, for instance, may optimize midnight routes by taking advantage of calmer highways. One worker would accompany the delivery of items to doorsteps, and overnight routes minimize the likelihood that the rider will have to contact anybody else to maximize employee safety. The driving would be done by an autonomous vehicle, freeing the delivery person to concentrate on sorting parcels.

4. Simulated Logistics

Before the products ever leave distribution facilities, logistics simulations help streamline last-mile delivery. Businesses are becoming increasingly aware of big data, analytics, and AI possibilities for improving operations and logistics. These solutions may help companies increase productivity, reduce delays, and guarantee a smooth last mile.

For instance, UPS organizes its extensive delivery network utilizing AI optimization and logistics simulations. Utilizing network planning tools, UPS may examine Big Data gathered throughout its network to spot bottlenecks and volume trends.

The logistics crew benefits from real-time data analysis and predictive model generation via AI. This enables UPS to foresee times of high volume and adjust as necessary. Since this technology is generally accessible, numerous organizations can adopt UPS’s workflow.

5. Delivery Using Crowdsourcing

The United States is going through an unusual “Great Resignation” trend throughout 2021 and 2022. Millions of individuals are leaving their jobs in favor of ones that provide greater compensation and more freedom. Businesses have the chance to fulfill last-mile demands while providing job searchers with what they want.

Companies that offer quick food delivery, like GrubHub and UberEats, have benefited from crowdsourcing. Through the company app, these platforms enable employees to select their schedules and accept assignments. The app locates a nearby, available driver and presents them with the route when fresh orders are placed. The motorist is then provided with real-time directions along their trip via the app. Technology makes this possible and provides amazing flexibility.

Businesses may use the same crowdsourcing technique for last-mile deliveries. Although it may appear unusual, clients are accustomed to crowdsourcing, and it has become a common work. Businesses may save money on gasoline and vehicle upkeep, while drivers can choose their hours. Getting items delivered around the clock is also simpler, with so many options.

5 Trends that Will Continue to Shape (and Change) Last Mile Delivery in 2022

With new technologies, businesses have incorporated innovation in their last mile delivery processes. From eliminating inefficient and obsolete phases to optimizing transparency and cost, there are many ways in which the last mile delivery system can be enhanced. The following section will introduce the five most common and result-oriented trends with the potential to shape the last mile delivery system in the coming years.

1. Smart Technology 

Technology has improved to such an extent that businesses can now track the movement of their shipment, the condition of all the cargo, and the fleet position. For instance, incorporating RFID and GPS tags can help them understand the real-time position of their fleet. As a result, customers’ predictive analysis and push notifications can be processed easily. 

Similarly, thermal sensors can determine the temperature and humidity of all cargo, like medicines, pharmaceutical products, frozen fruits, etc. With these embedded technologies, maintaining transparency and the exact condition of the shipments is now much more convenient than earlier.

2. Cost Reduction

Most businesses spend thousands of dollars just to maintain the condition of critical cargo elements like pharma products, food, beverages, packed drinks, and so on. Instead of spending so much money, proper analysis can help these businesses to implement different methods and use appropriate technologies to monitor the temperature and humidity of cargo at optimal levels. 

In addition, AI-based data analytical models can easily provide insights into the business expenses for last-mile delivery. Businesses can use the data to revamp their operations and incorporate technology to cut costs.

3. Faster Deliveries (Same Day & Instant)

The two most popular trends in the last mile delivery industry are Same-day and instant deliveries. Many say that these trends are born from Amazon, which has warehouses worldwide with a solid logistics and shipping network. 

Incorporating the same trend in your business can help you take the customer experience to another level. However, you have to optimize the delivery routes and network to ensure the customer orders are fulfilled on time, without delay. Even if there is any delay, you must integrate an automated push notification system in your business operations so that customers can know about the delay beforehand.

4. Distributed Warehouses

One of the major challenges most shipping and logistic companies face is the limited number of warehouses. There is a central warehouse where all orders arrive from across the world. Sorting and order batching are done at the central warehouse, where the cargo is dispatched to the smaller ones in each city.

This is a distributed warehousing network with multiple warehouses at the endpoints of the logistic and shipment channels. Due to the presence of so many storage places, the pressure on a single warehouse reduces significantly. As a result, deliveries can become faster, and you can live up to your customer expectations more conveniently.

5. Insourcing Deliveries

Outsourcing last-mile deliveries is a common practice followed to date. However, it not only increases the operational costs but also adds more overheads to the invoices. Besides, companies that outsource the last mile delivery system might be unable to live up to your expectations. Therefore, it is better to insource the last mile delivery network within your business redial.

What Companies Provide Reliable Last-Mile Delivery Solutions?

1. Onfleet

2. Nuro

3. Postmates

4. Starship Technologies

5. Matternet

How Can We Help You?

We at Emizentech offer on-time and high-quality last-mile deliveries to two different locations and a plethora of pin codes within the country. We aim to ensure that our services can help you connect with your customers in the best possible ways and take your business to another level. Apart from this, we also ensure that no parcel is damaged during the deliveries, regardless of how difficult the transit is.

We have incorporated many technologies to streamline the last mile delivery process and help faster shipping and deliveries. We can handle several challenges from instant to same-day deliveries without compromising customer satisfaction. So, if you want to collaborate with a company offering premium-level last-mile delivery services, ABC is your one-stop solution.

Conclusion

Now you are aware of the entire last mile delivery system, the challenges faced, how technology can improve the system, and so on, you can easily streamline your business. All you have to do is ensure your last-mile delivery system is optimized from all senses, whether it is the safety of the parcels or speed of delivery, for instance, or same-day orders.