4 Ways to Improve Last Mile Delivery
There's nothing quite like that feeling of a package arriving. Whether it's new workout gear from a far off boutique or a poke bowl from down the street, discovering your order has arrived at your door on time is always a delight.
From a consumer's point of view, the process of receiving what you ordered seems like a seamless experience: You go online, click a few times, and within two days (voila!) your item has arrived.
However, few consumers realize just how much work goes into having your order delivered, intact and on time. For instance, the last mile delivery. Essentially, this refers to a product's journey from a warehouse shelf, to a delivery truck, to your doorstep. In the supply chain, this is typically a part of the fourth step, which typically flows as follows:
- manufacturing; and
That final step — the point at which a package arrives — is both the most gratifying part of the customer experience, and for companies, the most expensive and time-consuming part of the shipping process.
During the past decade, technology has allowed the last mile delivery to achieve new heights of speed and efficiency. However, there are still problems and challenges, especially in a world where consumers expect their deliveries at lightning-fast speeds.
Problems With Last Mile Delivery
Here are three key challenges that can drive up the cost and efficiency of last mile delivery:
When a package arrives too late, or too early, it can frustrate buyers. Communicating incorrect arrival estimates can cause consumers to miss deliveries — and sometimes packages are left out for the taking. Porch piracy, as it's frequently known, has become surprisingly common. In fact, 14 percent of Americans have fallen victim to porch package theft, although some estimates put that number as high as 64 percent.
The standard for online shopping is, and has been, free shipping. While this makes for an excellent marketing tool, the growing number of packages and deliveries ordered online, instead of in-store, leads to increased supply chain bottlenecks and consumer expectations of two-day delivery. In addition to placing strain on the supply chain, free shipping comes with an environmental cost, with more and more fuel emissions associated with deliveries.
Inflation, increased consumer demand, and supply chain shortages because of COVID shutdowns all play a role in the rising cost of delivery. These factors and more have forced up the price of last mile delivery, which can comprise up to 53 percent of total shipping costs. The problem is further compounded with consumers accustomed to free shipping. Not surprisingly, supply chain operators are searching for ways to reduce this major cost and improve their bottom line.
4 Ways to Improve Last Mile Delivery
Here are four ways retailers can improve the logistics and cost of last mile delivery:
1. Update your devices.
Improving the technology stack for your drivers and logistics personnel can have a big payoff. Many last mile delivery operations are running on old mobile devices that haven’t been upgraded in years. Adopting new technology platforms that allow for flexibility in upgrading devices will ensure your fleet has the latest technology. Additionally, modern devices reduce crucial seconds with faster processing power and more real-time data feedback to operations to improve routing and delivery times.
2. Adopt automated communication.
As mentioned earlier, last mile delivery requires accurate and consistent communication between the delivery service and the consumer. Adopting programs that can implement automated, accurate delivery updates keeps your customers happy and improves delivery times.
3. Iteration generates perfection.
Utilizing powerful supply chain technology can unlock valuable insights. You can not only hone in on areas for improvement, you can also better visualize and understand the areas in which you're excelling. Using this data to optimize your strategy and constantly evolve your last mile processes will move your operations toward a more efficient, cost-effective last mile operation.
4. Monitor driver performance.
Platforms that use GPS let you track locations and performance of your last mile fleet in real time. While this can lead to better last mile outcomes, it can also cause employees to feel urgency to meet standard and drive at unsafe speeds. To ensure the safety of drivers, operations should implement specific goals as a part of performance to maintain a safe — and positive — work environment.
Gabe Grifoni is the founder and CEO of warehouse technology provider Rufus Labs.
Related story: Tackling the Disruptions and Scarcity of the Supply Chain