What is last mile delivery and why is it important?
Last mile delivery is basically the last step of your supply chain operations. It refers to a product’s journey from a warehouse as it is delivered to the final consumer’s doorstep. It’s the final step of the delivery process. Last mile delivery is critical and should be managed effectively so that you can ensure speedy delivery of your goods and products.
With the growth in customer demand, businesses are focusing on last mile home delivery heavily. They’re looking for last mile delivery solutions to ensure quick and efficient shipments.
Whether the package is being delivered to a personal residence, an office, or a retail store, the final destination of the supply chain should be covered at lightning-fast speed to ensure that customers are satisfied and delighted.
However, final mile delivery usually tends to be the most expensive part of the journey from the transportation hub to the customer, which is why there is a desperate need for resource optimization.
Last mile is extremely important because it has a major impact on your customer satisfaction levels and on customer loyalty as well. In fact, 74 percent of consumers would be more likely to make repeat purchases from a business if they received same-day delivery. Around 25% of customers would actually be willing to pay a premium to receive that service.
Why is last mile delivery difficult?
Last mile delivery is difficult because it involves several stops with low drop sizes. In rural areas, delivery points along a particular route could be multiple miles away from each other, with only a couple of packages needing to be dropped off at each delivery point. And while delivery point can be fairly close to each other in urban areas, the delays caused by traffic more than make up for the benefits gained by proximity.
Speeding up last mile delivery services generally tends to require a lot of manpower, a large fleet of vehicles, and quite a bit of money, especially when the company is trying to offer same day delivery. Last mile delivery processes account for 53% of the total shipping costs. There are a lot of complexities involved in a last mile delivery network, there’s more time on the road, many stops, failed deliveries, and even unnecessary miles traveled. Even the driver’s salaries account for a very large part of the total cost.
The traditional last mile delivery model is not particularly sustainable either. The large number of last mile delivery vehicles required and the complexity of roads tend to cause an increase in air pollution, congestion, and noise, along with fuel inefficiency due to the nature of the delivery process.
Another issue with last mile delivery is that inspite of tracking IDs that show customers the delivery status of the package, customers aren’t satisfied. They want to monitor each step of the last mile process even if it’s they’ve opted for same day delivery. Why do you think people are always wondering where their pizza is, even the delivery is only going to take about half an hour?
And then there are all the unpredictable variables that mess with logistics companies’ schedules. There’s unexpected traffic, weather conditions, even stuff like flat tyres that could cause delays. To manoeuvre around these, logistics companies need to have seamless communications and have contingency plans in place to make sure that they can deliver products as quickly as possible.
How can you improve your last mile delivery?
Here are some steps that companies can take to improve their last mile delivery:
Centralize logistics data
Having all your logistics data like inventory levels and deadlines in one place, visible on a single dashboard can vastly improve last-mile delivery operations. When your logistics data is centralized, it’s easier to spot delays, cost overruns and safety concern which have a significant impact on operational efficiency and customer experience. It provides insights in a quicker manner and helps you speed up your decision making.
Real-time driver tracking
Letting customers track their shipments in real-time reduces the anxiety that customers face as they wonder where their packages are. It also leads to happier customers and lighter workloads for your customer service representatives as your customer support requests will be likely to decrease significantly. This real-time tracking is already available on some delivery management software.
Automatically send notifications about delivery status changes
You can use a WhatsApp chatbot to automatically send notifications to your customers about changes in delivery status. It’s all about increasing transparency by giving your customers real-time updates about the status of their shipments and letting them know when they can expect to receive the delivery of their packages. Even if you are facing delays, it is a better idea to keep the customers informed, rather than hitting them with surprise delays.
Keep track of driver performance
Tracking driver performance and driving could aid in improving last-mile delivery. Unsafe drivers can have a negative effect on company expenses and turn into a public relations problem. In order to them being on time, the number of deliveries they make and their turnaround time, it is also important to keep an eye on safety and efficiency. If your drivers are speeding, they endanger other motorists and pedestrians, are more likely to cause accidents and are at greater risk to damage a delivery vehicle.
Automate the planning of delivery routes
Using automation can improve delivery route optimization and driver dispatch. You can use automated route planning software to track the location of your last mile delivery vehicles by making use of hardware units. A manager can enter the drivers and their routes to the system, which can then optimize every route and send real-time vehicle information to the manager's dashboard.