As the online consumer base continues to surge, the need for swift and complimentary delivery services has become increasingly crucial. Consequently, e-commerce enterprises are in a constant pursuit of enhancing effectiveness and reducing expenses within their shipping logistics to remain competitive. A critical aspect of this endeavor is optimizing the company’s last mile delivery process.
In essence, excelling in this area has become paramount for any business striving to thrive in today’s market. By focusing on streamlining last mile delivery, companies can secure their position and meet the escalating demands of customers.
Last mile delivery marks the final and most crucial stage of the delivery process, as it involves transporting an item to its ultimate destination, typically a personal residence. Meeting customer expectations for fast and preferably free delivery adds to the complexity of this stage, making it a significant challenge for online retailers to tackle.
This article delves into the intricacies of the last mile delivery problem, highlighting its substantial impact on delivery logistics costs and operations. We will explore five effective approaches to address this challenge while also presenting a couple of bonus solutions at the end. By the end of this read, you’ll gain valuable insights into how to enhance last mile delivery and satisfy customer demands more efficiently. If you want more information on Last Mile Delivery solutions, visit: https://swiftdeliveryandlogistics.com/pooled-distribution-dedicated-transportation/
What is the Last Mile Problem?
The Last Mile Problem refers to the challenging aspect of the delivery process where customers expect both free and fast shipping. Ironically, this final leg of the delivery journey also stands out as the most costly and time-consuming, accounting for up to 53% of the total shipping expenses.
In light of e-commerce behemoths like Amazon setting high standards by offering delivery within a mere two hours, businesses are under pressure to find solutions that enable them to match this level of speed and efficiency. Meeting these customer expectations is crucial to maintain customer satisfaction and loyalty.
What is the primary obstacle faced in the last mile?
Companies are aware of the necessity to adapt in order to thrive. This frequently involves absorbing additional expenses to fulfill consumer demand, which currently accounts for approximately 25% of the overall cost. Moreover, this percentage is steadily rising due to escalating inefficiencies.
Given the continuously increasing number of shipments across various industries, enhancing the last mile presents a significant potential return on investment.
What causes the Last Mile to be consistently the longest?
Several factors contribute to the extended duration of the last mile. Firstly, inadequate delivery infrastructure in many companies leads to longer journey times. This inefficiency stems from suboptimal routes and the use of outdated delivery technology.
Furthermore, the distinction between B2B (Business-to-Business) and B2C (Business-to-Consumer) deliveries plays a role. Shipping costs remain high regardless, but delivering goods to other businesses is generally less expensive due to their tendency to place bulk orders for high-value shipments.
On the other hand, delivering to consumers tends to be notably more expensive. This is primarily due to the fuel costs incurred when reaching multiple addresses and the time spent on these deliveries, all for shipments that are relatively low in value.
Moreover, consumer deliveries present additional challenges, such as the absence of regular business hours, resulting in recipients not always being available to receive their parcels. As a consequence, delivery drivers must make multiple attempts or travel to alternative locations to leave the parcel for customer pickup.
Furthermore, various customer-related complexities arise, including incorrect addresses, remote locations, and order returns.
The pressing question now is how companies can meet the increasing demand for faster deliveries from customers. We will delve into strategies for optimizing your last mile delivery process next.
5 Strategies to Address the Last Mile Problem
Having recognized the crucial role of optimizing the last mile delivery process in ensuring customer satisfaction and, ultimately, the long-term survival of a company, here are five effective ways your business can tackle the last mile delivery problem.
1. Enhance Customer-Warehouse Proximity
When evaluating warehouse options, consider not only the rent prices but also the proximity to your customers. Being close to your customers can lead to significant long-term savings by reducing delivery times, costs, and fuel consumption.
Strive to establish warehouses and fulfillment centers in well-distributed locations to cover a broader geographic area and be nearer to a larger customer base. For instance, having at least one warehouse on the East and West coasts enables faster deliveries to customers on opposite ends of the country.
2. Streamline Delivery Routes
Effective route planning can significantly reduce delivery times.
Utilizing software to plan routes not only saves time compared to manual planning but also helps in reducing the number of drivers required to complete deliveries each day, as routes can be dynamically updated in real-time.
Swift Delivery and Logistics optimizes delivery routes by considering factors such as time, location, vehicle capacity, and traffic to suggest the most efficient routes. Additionally, the platform sends real-time updates on traffic conditions to drivers via SMS, further optimizing travel time and empowering the drivers with crucial information.
*Swift Delivery and Logistics’ user interface displays the most efficient delivery routes in real-time.
3. Reduce Labor Costs with Auto-Dispatch
Auto-dispatch significantly enhances the efficiency of last mile delivery by lowering service costs related to dispatch operations.
Swift Delivery and Logistics simplifies this process by enabling automatic assignment of deliveries to your drivers. Here’s how it works: the system identifies all your “active” or currently working drivers and automatically selects an available driver located closest to the delivery destination.
Once the delivery is assigned, Swift Delivery and Logistics provides the driver with the shortest route to reach the destination.
Auto-dispatch offers several benefits. Most notably, it prevents accidental assignments of the same task to multiple drivers or uneven distribution of tasks among drivers. You can set task limits, such as two tasks per driver, which will exclude them from further assignments, even if they are the closest or have the shortest route.
*With Swift Delivery and Logistics, you can automatically assign deliveries to the closest driver or the one with the shortest route.
4. Communicate With Customers
Ensure customers are well-informed throughout the delivery process by sending regular notifications to keep them updated on their package’s status.
This not only benefits the customer but also aids the driver in ensuring that the customer will be available at the designated delivery time and location.
Swift Delivery and Logistics offers extensive customer communication features. Customers can track their order, directly communicate with the driver, receive SMS notifications to track the vehicle carrying their package, and participate in a real-time feedback loop.
Once a delivery is completed, drivers can provide proof of delivery. This documentation serves as verification that the item has been delivered, and it may include a recipient’s signature or a photo of the package at the delivery location, along with a date and time stamp. This process not only protects the driver in case of missing packages but also helps prevent fraudulent loss claims.
Swift Delivery and Logistics simplifies the proof of delivery process with its mobile app, enabling drivers to complete the entire procedure effortlessly. The app supports features like photo collection, signatures, barcode scanning, and notes to ensure accurate and reliable proof of delivery documentation.
5. Offer Real-Time Delivery Tracking to Customers
For e-commerce companies, providing tracking numbers to customers is now an essential requirement, not an option. Neglecting to do so will result in customers reaching out to your customer service team for updates on each delivery, leading to increased costs that could easily be avoided by offering tracking information from the outset.
While traditional tracking numbers may indicate the city where a parcel is located or the dispatch time for delivery, modern delivery software takes it a step further by enabling real-time updates on deliveries to be shared with customers.
