Last mile delivery

Last-Mile Delivery Logistics: Problems & Solutions

Last-Mile Delivery Logistics: Problems & Solutions

In this post, we’re going to reveal the solutions to the biggest problems in last-mile delivery logistics. Including the tools, techniques, and tips to solve them.

So if you’re looking to:

Cut costs.

Attract more customers.

Raise delivery efficiency.

Then, you’ll love this article and the solutions in it.

Let’s get started.

What Are Last-Mile Delivery Logistics?

Last-mile delivery logistics are a series of processes and activities that enable companies to distribute and move goods across supply chains and to customers and to fulfill their orders.

Logistics of last-mile delivery has one goal: to deliver the product as fast as possible.

Why Are Last-Mile Delivery Logistics Important?

Last-mile delivery has been the lifeline that’s been able to drive the global economy during the COVID-19 pandemic.

In fact, according to a study by McKinsey, the cost of global parcel delivery, excluding pickup, line-haul, and sorting, amounts to €70 billion.

Three countries: Germany, China, and the United States, account for more than 40% of the market.

So delivery logistics don’t just drive growth at the company level. They also drive market expansion at the global level.

Read this article if you’d like to know more about the impact of COVID-19 on last-mile delivery.

Why Is Last-Mile Delivery Difficult?

Last mile delivery is difficult to manage because it requires at least four different elements for it to work:

1. Structure

2. Processes

3. People

4. Technology

All of these four elements also require a lot of resources, while not churning too much profit in return.

At the same time, major players in e-Commerce, such as Amazon and Walmart, and the state of delivery during the coronavirus, have brought about new consumer expectations.

From fulfillment speed, through new delivery options like curbside pickup and delivery, to demand for low-cost and even free delivery, all of it is making it difficult for SMBs to keep up.

Then, there is the question of efficiency in last-mile logistics. Or how to reduce the amount of resources you spend fulfilling each order.

Plus, unpredictable elements that may occur and disrupt operations, and which businesses can’t control.

Businesses that offer delivery need to take all of this into consideration. But also the fact that they’re not the only players in the last-mile delivery services game.

Competition is high. And as more and more companies move into the online marketplace, it will only get higher.

Read this article to find out how to compete with Amazon delivery.

Last-Mile Delivery Challenges

The last mile is the last leg of the delivery process.

Typically, every delivery process starts from the distribution center or hub and ends at the customer’s doorsteps.

The final-mile delivery can vary from a few blocks to 50 or sometimes even 100 miles.

The internet has transformed traditional retail into e-commerce.

That change brought along a change in customer’s shopping habits.

Nowadays, everyone wants their delivery as soon as possible. In fact,

88% of consumers don’t mind paying an additional fee if it means they will receive their order faster.

Additionally, when you think of the state of delivery in time of coronavirus, you can imagine that solving last-mile delivery logistics becomes even more challenging.

To explain it even better we’ll go through the top 7 challenges in last-mile logistics.

#1 Consumer Behavior

E-commerce and the other factors that make last-mile delivery difficult have brought about a shift in consumer shopping habits and behaviors.

One of the top reasons for this is the fast development of new technologies.

E-commerce shopping provides customers with a chance to compare several products at the same time from the comfort of their homes.

The expectations are higher than ever, they are demanding in terms of customization as well as product differentiation.

#2 Poor Infrastructure

A common challenge in last-mile delivery logistics is poor infrastructure. This has both to do with modern urban infrastructure and business structures that support last-mile delivery.

On the one hand, the rise in demand for delivery services has increased the amount of traffic in urban areas.

More vehicles on the road means more traffic congestion. And that translates into higher transportation costs.

On the other hand, it’s difficult to fulfill orders in cities without adequate fulfillment centers.

And, as there is a lack of space in cities, the high real-estate costs mean it’s difficult for SMBs to get a hold of these storage facilities so that they can handle urban delivery.

#3 High Delivery Costs

High delivery costs is another challenge of final-mile logistics.

Companies have to spend a lot of money to fulfill orders, while often getting low returns. Or, in some cases, not getting any returns due to free delivery.

Read this article if you want to know how to offer free delivery to your customers.

But last-mile delivery logistics costs are expensive for both customer and business.

Setting up an infrastructure that supports modern deliveries can be costly, especially same-day delivery.

The expectation of same-day deliveries has had a big impact on the budget of SMBs and big names in e-commerce.

In fact, 28% of the entire delivery cost actually comes from the last mile.

Shipping and logistics companies also have to allocate additional funds to failed deliveries, e-commerce returns, and any unexpected events that hinder accurate order fulfillment.

For customers, high delivery costs directly lead to an increase in cart abandonment rates.

In fact, research shows that 55% of customers abandon their shopping carts if presented with an extra shipping cost.

#4 Transparency

Customers want to have real-time visibility of shipping and last-mile delivery. They require to know when the driver would arrive exactly.

That’s why a last-mile delivery logistics solution needs to be more transparent and keep the customers aware of their moving transport.

Apart from being very curious, people don’t get easily pleased. That’s why tracking codes are not enough anymore.

Today, users want absolute real-time visibility**.** Which means they want to see where their order is in the last mile as it moves across it.

Even if the delivery is on the same day, they still want to receive a more accurate estimated time of the arrival of their package.

#5 Address Location and Delivery Allocation

Factors such as an inaccurate address, locating the place, no parking availability, customers that want to return a product, and many other issues change the cost and time.

In fact, most failed deliveries are caused by wrong addresses.

To understand the severity of the problem, you should know that the cost of a failed delivery can be as much as $16.58.

Hence, it’s not unusual that in most cases, the incorrect address is a serious problem.

Besides that, there is a problem with brands and companies that still manually plan deliveries, which naturally leaves room for human error.

The new business model is focused on the fast delivery of both products and services.

#6 Efficiency

The new business model is centered on the fast delivery of both products and services.

To achieve that, you need increased efficiency, which sadly isn’t the easiest thing to do.

Here, technology plays a key role. It helps you to keep up with consumer demands.

Last-mile delivery logistics technologies such as delivery software allow you to streamline operations from the first mile of delivery to the customer’s door.

This means you can cover every step of first-mile and last-mile delivery.

Last-mile delivery logistics software plays the main role in making last-mile delivery more efficient.

#7 Last-Mile Delivery Density

For last-mile delivery logistics to be efficient, there has to be sufficient delivery density.

Routes have to have as many stops as possible to minimize transportation between them, which helps cut the cost of delivery.

But as more companies deliver products in cities like London or New York that also means that there is a lot of competition.

So even if you deliver goods in major urban centers, manually planning routes for vehicles may still lead to lower stop density.

Again, that can have a serious impact on efficiency, as well as the cost of your operation.

Luckily, there is a solution for all of the last-mile delivery challenges:

Last-Mile Delivery Software: The Solution to Last-Mile Delivery

Now, when we went through all the major challenges that last-mile delivery is facing, it’s time to check the solution.

The ultimate last-mile delivery logistics solution is feature-rich software that can transform your business by making your last-mile delivery more efficient than ever.

Let’s take a look at some of the major solutions that last-mile delivery logistics software can offer you.

#1 Route Optimization

Route optimization performs a crucial role in reducing the total delivery time by discovering the most efficient routes.

Optimizing delivery routes helps you to scale up the output of your delivery fleet. While scaling down the resources you waste.

How exactly does route optimization software help you with that?

The software takes into account different factors on the road including:

  • Types of roads
  • Traffic patterns
  • Number of crossings
  • Roundabouts
  • Traffic junctions
  • Stoplights en route
  • Crossing the line of traffic (turns)

Once route optimization software calculates all of these factors it gives you the most optimal route with multiple stops automatically and in seconds.

It allows you to make any last-minute changes or re-optimize by sending a real-time update to the driver.

#2 Automated Last-Mile Delivery

The auto-dispatch feature helps in the efficient management of all the on-demand orders and hot-shot assignments.

You can use software to automate almost any delivery process or operation for instance:

  • Receiving and managing orders
  • Tracking supplies and inventory
  • Planning routes and schedules
  • Dispatching drivers to deliveries

Technically, the software lets you automatically fulfill all of these tasks which help you to minimize the service time and labor costs.

Automated last-mile delivery gives you a chance to grow profit by offering speedy delivery - also known as same-day delivery.

#3 Real-time visibility

One of the most convenient last-mile delivery solutions is real-time visibility.

Last-mile delivery software has a real-time delivery tracking system in it, that helps you to increase the fleet visibility.

You can literally see where your vehicles are and how many of them are slacking.

The visibility is crucial for last-mile delivery transportation logistics because it offers you better control over your vehicles.

It also helps in minimizing spoilage and theft.

#4 Real-time status update

A real-time status update is one of the ways you can improve last-mile delivery.

The last-mile delivery software not only gives you real-time visibility of your vehicle but also makes your delivery process transparent by providing real-time status updates of the shipment to the customers.

This is how the customer knows exactly where their shipment is when it would be delivered and by whom.

Customers love direct communication like this because it gives them a sense of greater value.

Updating customers about their delivery status and notifying them when it arrives makes them feel safe about their decision to do business with you.

#5 Audit Key Metrics

Last-mile delivery KPIs are windows into a business, its success, and efficiency, and can tell you the truth about your delivery operations.

This is how you can visualize important metrics such as success rates, service times, success rates, on-time rates, feedback scores, distance traveled, and many more.

You can also measure the achievements of your delivery service using a powerful digital logistics solution to monitor a handful of key metrics.

With all of this information, you can know exactly what to do in order to scale your final-mile logistics.

#6 Proof of Delivery

Proof of delivery is a form of assurance about the delivery agreement.

It protects both the sender and receiver and the delivery provider. If both sides sign it that means everybody gets what they’ve agreed.

This means it was a successful delivery.

The last-mile delivery management software allows you to complete the delivery with the help of in-app signatures, notes, photos, and barcodes.

#7 Bird’s Eye Perspective

Last-mile delivery software gives complete visibility over your operations.

From your drivers and vehicles (and their location), to how many orders you have on the road, it gives you complete insight and control over every moving part on the map.

This means you spend less time acquiring and accessing vital information, which gives you and your team more time to concentrate on other aspects of your business.

Benefits of Last-Mile Delivery Logistics Solutions

After going through all the major features of last-mile delivery software, let’s see how last-mile delivery software technology can benefit your business.

#1 Flexibility in Delivery

Modern customers especially new generations value if your services are flexible and customizable.

They live a busy & fast life due to which they might not receive the shipment at a particular time but with last-mile delivery software you can enable your customers to change location and the time of delivery.

Flexibility is what today’s customers need and what they value in last-mile delivery.

#2 Increases profitability

Last-mile delivery software boosts profitability!

It increases fleet productivity, scales your business, optimizes routes, enhances customers satisfaction, reduces fuel consumption.

All these factors combined bring profitability to your business.

#3 Streamlines shipping and delivery options

The last-mile delivery solution automates repetitive tasks, hence saving time, money, and energy.

Besides, it streamlines all the other shipping & delivery operations so making your overall operations efficient enables you to serve a considerable number of people at once.

#4 Boosts Scalability

Last-mile software provides efficient routes for the drivers to complete the deliveries in the minimum time possible.

It also makes it possible to quickly onboard any 3rd party executive if any of the in-house capacity gets tired.

Another good thing is that it assists managers to optimize all deliveries planned for a day by efficiently planning routes.

#5 Allows Crowdsourcing

Location-based crowdsourcing allows consumers to open a mobile app to book a place to stay, order coffee to the office, hire a handyman, or do whatever else they want and need.

With crowdsourcing technology, businesses and consumers can connect directly with local, non-professional couriers who use their transportation to make deliveries.

The freedom to make on-demand and scheduled deliveries also ensure that customers are home at the time of delivery which eliminates the need for a second attempt.

We can help you to learn more about how you can solve other problems in the last mile.

Here are the nine free guides that will show you exactly what we do to optimize the last mile and dominate delivery logistics.

1. Elevate customer experience by building a Frictionless Delivery

2. Delivery Business Ideas for 2021: Start delivering goods right NOW!

3. What is Click and Collect? How can you offer it to your customers?

4. Crush fast fulfillment with higher delivery speed

5. How to Raise Order Accuracy (WITHOUT Raising Your Spending)

6. What Is Driver Tracking & How It Helps Your Business?

7. Vehicle Routing and Scheduling in Logistics: All You Need to Know

8. Upcoming trends in last-mile delivery: The future of delivery is HERE

9. Reverse Logistics: When eCommerce Return Costs Go Down, Profits Go Up

See how it works in action

eLogii is an end-to-end cloud-based delivery management platform. Our powerful solution solves the biggest challenges of modern distribution and field service businesses, including: route optimization, planning and execution.

BOOK YOUR DEMO in less than 2 minutes. Fill out a quick form and one of our experts will get in touch with you to show you how our solution works in action. The demo is tailored specifically to your business needs.

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