What are the biggest challenges facing last-mile delivery?
Some of the biggest challenges facing last-mile delivery and courier services include traffic congestion, delivery time windows, last-minute delivery changes, and the high cost of delivery. Additionally, ensuring customer satisfaction and managing returns can also be major challenges in last-mile delivery operations.
As e-commerce became extremely huge in the past decade, many businesses within the supply chain are consistently finding ways to meet customers’ needs. In addition, online shopping are projected to grow up to to 194.1 billion U.S. dollars in the UK by 2027 and globally retail e-commerce sales are forecast to grow by 56 percent, reaching about 8.1 trillion dollars by 2026. As a result, the demand will only grow bigger and solutions must be provided to the challenges in the supply chain. One of the best areas where organizations can improve is through their last-mile delivery.
In this article, we take a careful look at last-mile delivery, the challenges it continues to face, and how organizations can address this.
Order Fulfillment In the Supply Chain
Order Fulfillment In the Supply ChainOrder fulfilment is a process. It begins as soon as a customer has chosen a product, and ends when the product is on the customer’s doorstep. The final stage of this process- known as the last-mile delivery, is also the most vital part. While it’s possible to speed up delivery, unfortunately, it increases the overall cost.
The success of order fulfilment ensures happy customers and keeps every retail business up and running. However, it faces a challenge: in this fast-paced world, many want their products instantly. With how quick and easy it is to order a product online, shipping always takes time. At the heart of the order, fulfilment is the last-mile delivery.
Defining Last-Mile Delivery
Last-Mile Delivery is the final step in completing order fulfilment. Furthermore, last-mile delivery is the step that delivers items from the warehouse into the arms of a customer. This step is the most challenging and expensive part of the process as well. Retailers and third-party logistics providers face unpredictable events when it comes to last-mile delivery.
The Challenges of Last-Mile Delivery
Last-mile delivery faces a multitude of different challenges. According to experts, the most common challenge in last-mile delivery is inefficiency. This last leg of the delivery process involves multiple stops with low drop sizes.
The completion of last-mile delivery relies on many different factors, including:
- The distance between the customer and the warehouse
- The distance between distribution centers and fulfilment centres
- The number of orders received and deliveries made in a single day
- The businesses (retailers and providers) and their size
These challenges are out of the company’s hands most of the time. For example, the delivery might run into traffic along the way. Or, drivers might get stuck because of sudden weather changes. It might be the location, where drivers have to travel great distances to deliver an item to the customer. Even so, companies just end up shouldering the expenses along the way. As the popularity of free shipping continues to rise, it becomes an added challenge for retailers and providers around the world.
Understanding and acting on these challenges will bring numerous benefits for any organization. Not only that, but it also brings better results for the entire industry.
1. Improper Route Optimization
Proper route planning increases the efficiency of last-mile deliveries. Route optimization takes into account possible traffic and many other factors. This ensures that each package arrives as quickly as possible and reduces costs as well as lowers customer frustration.
Route optimization is a key element in ensuring successful last-mile delivery. It has a strategic impact on cost and can directly influence ETAs. Route optimization software can help your team overcome this hurdle. It can be implemented right from the start until the last-mile delivery.
2. Lack of Logistics Transparency
Buyers want to know the exact location of their product and the expected delivery time. Customers demand absolute real-time visibility. As a result, visibility is the most significant prerequisite to develop credibility. In the last mile delivery, transparency is even more crucial.
To solve this issue, you can implement delivery management software. With this software, consumers can receive real-time updates. Your customers can have updates on the location of their items from the movement to the expected time of delivery.
3. Unpredictable factors
Each delivery is unpredictable. Couriers and drivers can run into sudden weather changes, traffic congestion, problems with their vehicles, and other factors. Unfortunately, there isn’t much one can do about it. However, with the proper approach, good communication between the driver and the customer, there won’t be much to worry about.
4. High Delivery Cost
Last-mile delivery will be one of the most expensive parts of completing your transaction process. It involves numerous steps, from planning out complex routes to allocating salaries for drivers it can easily get very costly. Rugged devices for last-mile delivery can easily reduce this cost. It is an all-in-one device that allows your team to easily work together and streamline the entire operation.
What are the Current Trends in Last-Mile Delivery?
1. Crowdsourcing or Gig Economy
Crowdsourcing or gig economy in the delivery scene consists of companies calling for drivers to bring the item to the customer. This method is not as neat nor is it as efficient as having an established system. However, crowdsourcing allows companies to cut costs on vehicles and allows better flexibility. There are numerous challenges though such as worker’s benefits, safety, and efficiency.
2. In-House Delivery Services
Some companies have resorted to using their own vehicles to have full control over their own delivery system. However, this method might be too expensive. As a result, a few companies share their vehicles to reduce the cost of having to buy vehicles. One of the ways to improve in-house delivery is to adopt digital transformation using tools like rugged devices.
3. Same-day delivery
The instant gratification given by e-commerce opens up opportunities for retailers and providers around the world. While food delivery services already use this system, many companies could invest in a similar system that allows same-day deliveries to happen.
Moreover, companies could invest in warehouses in or nearby major cities to increase the likelihood of rapidly fulfilling the wants of their customers. This also allows companies to offer instant deliveries as well.
4. Anticipatory Shipping
Anticipatory shipping is a system that predicts the items that customers might order. The system determines the possibility of a customer deciding to order a certain product. This prediction calls for these items to be shipped to warehouses beforehand. With anticipatory shipping, the time needed to deliver an item is reduced so much and can even cut costs.
5. Delivery Upselling
Similar to anticipatory shipping, upselling during every delivery allows for companies to predict a customer’s wants. Upselling during delivery helps companies know the interests of customers beforehand. This system is applicable to many industries around the world.
6. Traceability and Smart Technology
Every consumer wants to be updated on the status of their package at all times. The technology that we have today allows for better traceability of each order. Companies can allow their customers to see the current status of their package, from the beginning until it is delivered to their doorstep. Sensors or great inventory management with the use of the proper technology allows for real-time updates.
The Right Tools & Technology in Last-Mile Delivery
Last-mile delivery is a challenging aspect of the logistics industry. The increasing demand for faster and more reliable delivery has led to the development of new technologies to improve the process. Electric vehicles are one such technology that is expected to transform deliveries, especially in urban areas where emissions regulations are becoming stricter. In addition, businesses are experimenting with new supply chain models and technologies like data analytics and AI to increase parcel volume and expedite deliveries. To remain competitive, traditional last-mile carriers must embrace digitization and interpret data effectively while maintaining flexibility in their operations.
Using the right tools will help solve numerous problems in the last mile delivery. For example, rugged devices can help delivery drivers continuously be connected to a software or platform. Software built in artificial intelligence that can leverage historical data, delivery routes and customer expectations while maximising the full potential of the underlying features of their rugged devices will streamline fulfilment and improve customer satisfaction.
Final Thoughts
The help of the proper technology lets retailers and providers worry less about dissatisfied and unhappy customers. It allows companies more flexibility and smoother last-mile delivery. Furthermore, with the proper technology, the overall cost of last-mile deliveries are reduced greatly.
Have you found the right solutions for your organization? Rugged devices have continued to become the popular choice for many industries because of their reliability in performance. It is also the perfect choice for those who are wanting to save in the long run. To find out more about Conker’s list of products, make sure to check out the products here.
