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How to solve the last mile logistics challenge

How to solve the last mile logistics challenge

Defining last mile logistics

Last mile logistics refers to the last leg of supply chain operations. A product’s journey from a distribution centre to the doorstep of the end customer. The goal of last mile logistics is to deliver goods cost effectively, on time and in full (OTIF).

Last mile delivery has a big influence on customer satisfaction but can be the most time-consuming and expensive stage of the entire supply chain process.

Customer satisfaction is integral to the success of any business and retailers and couriers cannot afford the reputational damage that comes with a poor last mile logistics delivery service.

 

What are the challenges of Last Mile Logistics?

Businesses of all shapes and sizes face a plethora of challenges in their last mile logistics processes. Be it, driver shortages, product weight or dimensions, vehicle capacity, not having access to a real-time view of operations or factoring in the real road network, road speeds, CAZ (Clean Air Zones) and commercial restrictions when producing routes.

In short, achieving maximum delivery density and On Time in Full (OTIF) deliveries at the same time is a mammoth task.

The costs and inadequacies of the last mile logistics problem have only been further heightened by the rise in eCommerce sales, which has dramatically increased the number of parcels delivered to homes each day.

 

Last mile logistics challenges

 

Other contributing factors include:

Different delivery personas

Some consumers have high expectations for next or same day delivery, others want to pay as little as possible, others value convenience and are prepared to pay more for it and now environmental concerns and sustainability are having an influence on delivery choices. Satisfying different needs adds complexity to delivery scheduling.

 

Spiralling transportation costs

Last mile logistics is often the most expensive and time-consuming part of the entire shipping process and rising costs mean companies must either increase their prices, which can lead to customer dissatisfaction, or suffer financial losses.

 

Reducing CO2 emissions

The pressure on businesses is increasing to prove they are doing everything possible to reduce their operational carbon footprint.

Be it the integration of electrical vehicles, introducing a robust route optimisation engine to reduce annual mileage or improving driver behaviour such as excessive idling, poor speed/gear management and harsh breaking through a telematics solution, companies are having to prioritise sustainability more and more to ensure they are on target to achieve net zero.

Try our Carbon Saving Calculator

 

Considering the consumer in last mile logistics

 

What do customers expect in the last mile?

To improve customer satisfaction with deliveries during the last mile of their journey, it is important that companies know and meet customer expectations.

Real-time tracking of packages has now become an industry standard. Consumers want to be able to monitor the location of their package, from the instant it left the warehouse until it arrives on their doorstep.

Brand reputation is on the line when products are out for delivery, and one of the things that can jeopardise the customer’s experience is a lack of communication or ambiguous delivery notifications.

The best part is that these notifications can be automated, allowing changes to be communicated instantly and accurate ETA’s to be sent to the customer.

Not only do consumers want these notifications, but so do business customers. Retailers, restaurants, supermarkets, factories, construction sites, and pharmacies are among the businesses that need this information from couriers and third-party logistics organisations to ensure goods can be accepted without delays.

 

How can companies address these last mile logistic challenges?

As e-commerce continues to grow, companies are having to reimagine their delivery operations and look for ways to implement efficient, cost-effective, and timely last-mile delivery processes. New technologies are enabling process advancements with capabilities to analyse real-time data and facilitate improved decision-making.

These technologies integrate machine learning and AI-based solutions for route planning, utilising the latest road network information, including not only the average speed of traffic but also the direction and time of travel. Creating highly efficient delivery routes and schedules enables businesses to make savings on their operational delivery fulfilment costs, reduce the time spent on planning, and plan optimised routes.

These routes will have a higher delivery density and each drop will have a lower CO2 per delivery associated with it.

 

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However, delivery plans do not always go to schedule, thanks to roadworks, traffic incidents and cancelled orders, so any route changes that are necessary can be given to the driver automatically in real-time along with the new delivery route.

It’s vital to have a robust and scalable last-mile logistics system that helps to deliver orders cost effectively. The latest technologies can create a route-planning approach that ensures transparency at all levels, whilst ensuring you stay one step ahead of this rapidly changing space, keeping customers happy, and promoting long-term company success.

 

Conclusion – Summarising the Last Mile Logistics Challenge

Last-mile logistics will remain a challenge for delivery services as the number of customers shopping online requiring home delivery, remains strong. It will be hard for logistics companies to create a positive and profitable customer experience.

As the number of deliveries and options for making those deliveries grows, businesses need scheduling, route optimisation, and customer notification systems that can keep up. Businesses are making the switch from ICE cars to EVs and other forms of alternative power delivery such as bicycles and drones, their delivery scheduling software will need to include additional factors such as range and charging time. Investing in solutions that accommodate the growing number of delivery options and vehicles by utilising Artificial Intelligence (AI) and algorithms will increase delivery density, reduce costs, and improve customer satisfaction.

 

Contact Descartes now to discover how we can help with last mile logistics.

 
 

Author: Harj Shemar, Senior Account Executive, Descartes Systems UK

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