- McKinsey and Company values parcel shipments at more than $83 billion.
- The e-commerce market will double in value in roughly ten years in developed markets.
- Global e-Commerce crosses $25.6 trillion in revenue as per latest UNCTAD estimates.
- In 2018, over 1.4 billion customers shopped online.
- Last-mile delivery takes up almost 30% of the total shipping fee.
When your merchandise arrives at your doorstep the very same day you placed an order, how do you feel? Ecstatic! You start thinking that you are special. Don’t you? Well, the ever-advancing digital technologies and efficient transportation of goods are leading to increased customer satisfaction and delight.
“Last-mile delivery” plays a critical role in how delighted customers feel when they receive on time the goods they ordered. “Last-mile delivery” is the pathway of goods from a transportation nucleus to the final hands of the customer. The emphasis of last-mile logistics is to deliver goods to the end-user in the shortest possible time after they leave the distribution center. It is the final and most important step in the delivery progression from a distribution facility to the end-user. For shippers, last-mile delivery or “last-mile logistics” is the foundation to steering growth and profitability.
Last-mile delivery throws up numerous challenges in the logistics chain. Long-distance maritime shipping is fundamentally a consolidated, high volume and low-frequency process. Whereas, on the other hand, the final delivery of the individual cargo is largely a low-volume but high-frequency process. Long-distance transportation is managed well by high-capacity modes like shipping and port terminals that can handle large volumes of cargo. The shipping network is thus able to offer high volumes per unit. Depending on the routes serviced, shipping lines can service a port two or more times a week. But this large volume of containers and goods that reach the ports have to be split into several smaller shipments for the final inland delivery. The main challenge lies here, and last-mile delivery is among the most complex components of the supply chain because it has to reconcile different shipments with too many customers.
So as one comes closer to the final point of delivery of goods, economies of scale are not easy to apply because the load size tends to reduce while at the same time there will be numerous packets waiting to be delivered within a selected geographical area. In most instances, it would be rare for a single customer to be the consignee of the entire cargo that arrived in one container.
Let’s explore how digitalization can significantly enhance last-mile connectivity.
Online Tracking And Delivery Apps
Online tools can monitor driverscarrying the parcels, and they play a key role in the smooth last-mile delivery process. The real-time tracking feature gives distributors access to the exact location of drivers. Alerts can be sent automatically if a driver deviates from a pre-determined route.
Centralize And Organize Logistics Data
Logistics data that is centralized and well-organized can provide a wealth of information to enable quick decision making and help understand the finer aspects of last-mile delivery for bringing continual improvements in speed and efficiency. Data analytics can be employed to select the appropriate delivery routes and enhance the delivery approach.
By outsourcing last-mile delivery to local third-party transporters who have operations in and around the residences or offices of the end-customers, companies can save time and cut costs. However, such third-party service providers should be chosen with caution. They must fit in well with corporate ethicsandthe company’s code of conduct.
Local Stores As Distribution Hubs
Shippers can team up with small shops in the neighborhood for executing the final delivery of goods. Staff manning these shops have a better understanding of the regional topography, so their time is well-utilized in carrying the goods to the hands of the customers safely and promptly.
Automation Of Status Updates
Customers are demanding when it comes to receiving real-time updates on the status of their parcels. So companies should make investments in providing automatic SMS notifications to the customers on the movement and live position of the parcels.