Posted On October 20, 2021
In the world of order fulfillment, last mile delivery is king.
From speeding up delivery times and maintaining transportation costs to boosting brand loyalty, last mile delivery can have a major impact on a company’s supply chain, not to mention the bottom line. But implementing last mile logistics takes the right resources, expertise and technology.
Keep reading to learn how your company can make it all work.
What is last mile delivery, and how is it different from same day delivery?
As the economy and technology continue to evolve, the way customers shop (and companies do business) changes as well. Last mile delivery has been on the rise in recent years, but what exactly is last mile delivery, and how does it compare to other delivery options?
Last mile delivery is the last leg of the supply chain journey that a product takes to get to its final delivery destination. For example, a truckload of widgets manufactured in Asia might come to the United States via Los Angeles. From there, part of the shipment gets moved to a transportation hub in Chicago, and then on to fulfillment centers in Atlanta and Boston. When a buyer in an Atlanta suburb orders one of the widgets, and it’s shipped from the warehouse to the buyer’s home, that last leg is the last mile delivery.
Same day delivery isn’t necessarily the same as last mile, but the two often overlap. If the buyer in the example we just used ordered the product and receives it later that day, that shipment is both same day and last mile. However, this delivery type is often used for time-sensitive packages and shipments such as grocery delivery and food delivery.
Sometimes, last mile delivery also includes installation, or delivery past the doorstep—like in the case of furniture delivery, where delivery drivers might carry the couches inside the house. Still, last mile delivery isn’t necessarily synonymous with white glove delivery, or the delivery of goods that require special attention and often trained installers. The shipping process and installation of a restaurant-grade oven, for example, might require white glove delivery.
The term “last mile delivery” can be a bit misleading, however. Just because something is being transported via “last mile” doesn’t mean the trip will only be a mile. Depending on the transportation hub and its final delivery destination, the last mile delivery could theoretically be 100 miles.
Last mile deliveries are almost always used in B2C instances, where the product was purchased by an individual consumer and is being delivered to a personal residence.
The rise of last mile delivery
For years, consumers have been increasingly conditioned to expect fast delivery—typically within two days or fewer, thanks to the infamous ecommerce giant we won’t name. And the pandemic, which led more consumers to use online shopping and purchase from ecommerce businesses, only increased the need for last mile delivery among retailers.
Because of this, ecommerce businesses are trying to maintain customer satisfaction and fast shipping times. By meeting customer expectations, keeping shipping costs low and executing a positive delivery experience, shippers can build brand loyalty and grow sales. But while the last mile delivery process might sound like the easiest leg of the supply chain, that’s not always the case.
Navigating last mile logistics
Shipping companies and online retailers face numerous last mile delivery challenges.
Last mile delivery service typically uses smaller delivery vehicles that can navigate residential delivery routes. It sometimes requires 2-person teams, lift gates and special training to transport and install larger items like appliances and furniture.
Geographic location also plays a factor in last mile logistics. In rural areas, a delivery driver might have to go several miles in between stops. Meanwhile, in urban areas, stops are more frequent and condensed, but traffic congestion can slow things down drastically.
Incorporating last mile logistics into a shipping company’s in-house delivery services often requires a large investment, so many carriers are choosing to outsource the last mile delivery process instead of handling the entire delivery process themselves. Often, private carriers transfer items to the United States Postal Service for the last leg, as it’s a natural fit—mail carriers already execute daily deliveries to residences across the country.
Benefits of last mile delivery
Rapid order fulfillment and last mile delivery can have huge effects on a business. Of course, providing faster delivery times to customers leads to improved customer satisfaction, and last mile delivery providers can often provide on-demand visibility for end users to track exactly where their shipments are, down to the block. Shippers can also receive proof of delivery after they deliver items, which is helpful in claims processes.
Last mile delivery costs and challenges
With all the benefits last mile delivery offers, it has to come with a price, right?
Yes—and no.
Typically, last mile delivery can help control costs or even cut costs, even though it often adds another party to the supply chain. The post office is a great example—since the USPS’ last mile logistics system is optimized to deliver packages to end users, there are often fewer fees than if the products were shipped via other parcel carriers like UPS and FedEx, and the total cost for a shipment can decrease.
Last mile logistics can be tricky to implement, though. Shippers need access to a network of carriers across the country. For a small online retailer, finding a last mile delivery provider for every market it delivers to can be extremely cumbersome. Some last mile delivery services will provide pricing and options from origin to final destination, while others require two separate estimates: one carrier providing pricing on the initial pickup and line haul, and the last mile carrier providing separate pricing.
Logistics companies can be great resources, and a transportation management system can help shippers quickly and easily find the best last mile delivery options for individual shipments.
Another challenge shippers face in last mile logistics is visibility. With each added carrier, ensuring end-to-end visibility becomes more challenging. Improved technology comes into play here as well, as a centralized system like a TMS can help companies stay updated on where a shipment is at all times. By using smart technology that tracks inventory management, customer data and various delivery points, companies can optimize their last mile deliveries to overcome their biggest challenges.
Questions about working with logistics partners?
Thinking about incorporating last mile logistics and final mile delivery into your supply chain? Our expert teams and technology help companies meet consumer demands, speed up delivery time and gain market share. Contact us to get started.
