Purchasing habits have evolved, particularly in the realm of online shopping growing rapidly. With mandatory lockdowns and people trapped in their homes, companies had to quickly alter daily routines and habits to adapt to the new online era!
Order fulfillment is a fundamental factor of any retail company. Therefore, online shoppers nowadays demand low-cost and quick delivery.
When a consumer places an order, the order fulfillment process begins and finishes when the product arrives at their place. For many retailers and logistics companies, the final part of the delivery process is the most difficult and expensive — it’s known as last mile delivery.
Last Mile Delivery Explained
The transit of goods from a transportation station to the ultimate delivery destination is known as last-mile delivery. Last-mile logistics focuses on getting things to the final user as quickly as possible. Due to the increased desire for fully integrated eCommerce, last-mile logistics has been a popular topic of focus for retailers. Retailers have been obliged to review their transportation system performance and make improvements in response to changing digital needs.
The Last Mile Delivery Process in 5 Steps
Step 1: Orders Submission
Orders are submitted digitally through a system and checked at this stage by both the sender and the final recipient, who is most likely checking the progress of their shipment via a tracking number.
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Step 2: Orders Arrive at the Distribution Center
This is when the last mile delivery process begins — companies must ensure that the order is delivered as quickly and efficiently as possible from the transportation hub to the customer.
Step 3: Delivery Services Assigned
Here delivery services are assigned to orders based on routes and customers’ addresses.
Having an efficient, cost-effective delivery last mile logistics solution requires strategically categorizing and designating items for delivery.
Step 4: Orders are Scanned
This informs the sender of the order’s progress as well as the ultimate receiver who is tracking the shipment. It also lowers the chances of packaged products being misplaced.
Step 5: Orders Delivered
Finally, orders are delivered to their intended customers successfully, and evidence of delivery is provided.
The delivery has arrived at its destination at this point. After that, the delivery man updates the tracking details to verify and confirm that the delivery has been done.
Last Mile Delivery Challenges
Today’s sellers are attacked with higher customers’ expectations, forcing them to develop new solutions to overcome last-mile delivery issues.
1# Challenge: High Cost
One of the most significant challenges is last-mile delivery, which accounts for 53% of overall delivery operational costs.
Customers’ expectations of same-day deliveries place even greater pressure on logistics companies’ budgets. E-commerce companies must also deal with unexpected demands, such as higher purchasing volumes.
The free shipping movement is another key factor that influences the cost of last-mile delivery.
2# Challenge: Customer Behavior
Last-mile delivery methods are often affected by customer personal behavior.
There may be an issue if the client does not supply accurate information or inaccurate addresses.
Similarly, there are situations when no one is available to receive an order, or the delivery is refused or returned.
Send out alerts and notifications to your clients along the delivery process to ensure that the recipient will be available to accept the product when it arrives.
3# Challenge: Post Covid-19
When it comes to last-mile delivery logistics, Covid-19 has had a significant impact.
For instance, an increasing number of people are purchasing online because they are unable to leave their homes.
On one hand, this is excellent since it means more business. However, dealing with the inflow of large delivery volumes is difficult. This puts a lot of strain on supplies to fulfil the increased demand.
Technological Advancements Improve Last Mile Logistics
Although there are challenges and difficulties that companies may address every day, however with technological advancements it can be controlled.
Many customers are already familiar with the concept of crowdsourcing local services through digital platforms, thanks to the rise of the big economy.
Retailers, logistics partners, and customers can use crowdsource technology to interact directly with local, non-professional couriers who make deliveries using their own vehicles.
The crowdsourcing approach has long been used in transportation, and food delivery and retailers are adapting it to solve their last-mile delivery problems because of its low startup costs.
Traceability has Improved
Last-mile delivery companies have increased package traceability by including features such as proof of delivery and tracking data.
This is a vital aspect of ensuring that packages do not go missing or determine where they are if they do.
New smartphone apps have also transformed the way we track parcels, with some systems. Including GPS capabilities that allow users to see exactly where their delivery is and how far away the courier is from their place.
In-House Delivery Services
Several companies have begun employing their shared trucks for in-house delivery services in order to reduce last-mile delivery costs. Some of these businesses have even started working together with competitors or other businesses in their area to share transportation assets and cut costs.
A mix of technological advancements may be the answer to growing last-mile delivery costs for online companies or third-party logistics providers.
The need to optimize last-mile delivery is obvious, regardless of your fulfillment method.
So, make sure to understand and apply the trendy techniques in your last-mile delivery process.