Last Mile Delivery Logistics

Things You Should Know About Last Mile Delivery

In the competitive world of e-commerce, there is a fierce battle for customers, and last mile delivery logistics has become an increasingly vital piece of the puzzle. E-commerce sales are expected to reach $1.35 billion by 2018, an increase of 28.8% from 2013, according to Datex. What’s more, there is a growing consumer demand for fast and “free” shipping for online purchases, which can be anything from electronics to groceries to pharmaceuticals, and beyond. On-demand shopping apps and services from Amazon and other players like Instocart, Etsy, Shopstyle and so many others are fueling this changing consumer culture.

Pressure is mounting on businesses both small and large to fulfill orders. In a survey conducted by McKinsey & Company, one quarter of consumers claimed they would pay extra for same day delivery, but only 2% would pay sufficiently more. This signifies a shift in both customer expectations and how retailers deliver to their customers. It also reveals the pressing need to implement the most budget wise and efficient last mile delivery solutions.

Challenges in Last Mile Delivery

While direct-to consumer purchases grow in popularity, retailers are faced with the challenge of cost and inefficiency. Last mile delivery is estimated to be around 28% of the total cost of shipping. The fuel and manpower costs of shipping directly to consumer residences are coupled with other difficulties. For instance, in high density areas parking is often more cumbersome, and shipping within Canada or the US, in more rural or less urban communities requires additional mileage and time paid to drivers. Finally, cancelled orders, incorrect addresses or customers who are unavailable to receive packages that can’t be left at the door add to the logistical complexities. While drones and self-driving vehicles pose cost effective options, government legislation, safety regulations, and many other factors are involved in the implementation of these technologies. Retail giants like Walmart have test driven the ride-hailing company Uber to deliver to online customers.

Last Mile Delivery Logistical Planning

Increasingly, companies are enlisting 3rd party logistics to manage shipping strategies and last mile delivery methods. Logistics technology with an integrated platform utilized and managed by a company with logistics expertise can provide streamlined distribution and visibility to the entire shipping process. Also take advantage of data analysis of customer shipping needs to implement an informed and comprehensive last mile delivery strategy, because every company and their needs shipping needs are unique.