Last-mile delivery: How to improve last mile logistics

With parcel shipments 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.

What is last mile delivery?

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 where our consumers expect fast shipping, making order delivery both expensive and confusing. So, why is it essential for an e-commerce business to fully understand last-mile logistics?

Understanding last mile logistics challenges

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.

How to improve last mile delivery

1. Enhanced Tracking with Modern TMS

Transportation Management Systems (TMS) have transformed asset tracking by automating processes and generating alerts for both shippers and consumers. ShipWise's shipment tracking software, for instance, integrates seamlessly with reliable carriers through advanced API connections, ensuring timely updates and efficient management of last-mile deliveries.

2. Leveraging Preferred Carriers

ShipWise enables effective last-mile strategies through its real-time rate shopping feature, allowing shippers to select preferred carriers for optimal performance. Enhanced tracking alerts improve visibility and mitigate risks throughout the delivery process. Additionally, adopting unconventional delivery methods has proven beneficial in addressing last-mile challenges, enhancing customer satisfaction and delivery reliability.

3. Innovative Drop-Shipping Solutions

Contracted delivery services such as Uber, Lyft, Shipt, and GrubHub are increasingly popular for handling last-mile logistics, especially for same-day deliveries. These partnerships allow for quick transfers from brick-and-mortar stores directly to customers, though they may not be suitable for all businesses. Companies should assess their specific needs to determine the best approach.

4. Adoption of Drones and Robots

As the industry pushes toward fast, automated, and contactless delivery options, technologies like drones and robots are gaining attention. Although not yet mainstream due to regulatory hurdles, companies are actively exploring these options to reduce delivery costs and enhance customer service. Initiatives like FedEx's investment in electric delivery vans also highlight efforts to improve energy efficiency.

5. Route Optimization Technologies

The rapid evolution of e-commerce has spurred the development of innovative technologies aimed at optimizing delivery routes. These advancements are crucial not only for cost savings but also for meeting consumer demand for sustainable shipping solutions. Route optimization technologies significantly reduce fuel consumption and carbon emissions, aligning with the increasing emphasis on environmental responsibility in the shipping sector. Companies must stay abreast of these technologies to remain competitive and environmentally conscious.

#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.