The final mile is everything in logistics, and according to David Meyers of Supply Chain 24/7, significant challenges exist in the final mile. These challenges contribute to higher costs and poor visibility within the final mile, tarnishing brand experiences and opening the door to the risk of stolen packages and upset. In today’s age, a “Just Leave on Porch” (JLOP) delivery is the worst-case scenario, but an integrated final mile is quickly becoming the solution needed for success and transparency in the final mile.
Challenges Contributing to Higher Costs in Final Mile
The final mile is riddled with risk and challenge. As explained by Business Insider, the increased demand for e-commerce and the desire for speedy fulfillment is now a typical shopping experience. Unfortunately, staff fulfillment is anything but green and cost-effective. Businesses are struggling to develop the technologies and supply chain models to supplement both traditional, business to business shipping, as well as meet the expectations of consumers. The problem is even more cumbersome for shipments and consumers that must go same-day shipping, and Amazon is not helping the problem.
Moreover, the final mile is the least transparent phase of shipping. For example, the final mile status is comprised of two things: “out for delivery” and “delivered.” This derives from the multiple stops with below-drop size in the final mile. However, changes within the supply chain, specifically integrated final mile logistics, might be the solution.
Using a TMS to Execute a Final Mile Strategy that Yields Desired Outcomes
What Does Integrated Final Mile Logistics Mean?
Integrated final mile logistics is a game-changer for shippers that need to increase transparency in final mile logistics management. Integrated file mile logistics means combining the systems available within the final mile with the existing systems in your supply chain network. Obviously, delivery scans and package movements need to be tracked, and consumers want faster fulfillment. As a result, more businesses are turning to the crowdsourcing model of final mile logistics, hiring third-party, independent drivers to deliver packages and rural and urban areas. In a sense, this is the Uberization of final mile logistics, and it requires a thorough integration of all systems with available third-party apps. Even Amazon has gotten into the game with the outsourcing of work to smaller, independent delivery drivers, using their own personal vehicles. In fact, major players in the logistics space have recently partnered to offer expedited final mile and meet consumers’ demands through both crowdsourcing and customization of the final mile, says Jeff Berman of Logistics Management. This business model provides excellent advantages for shippers, but it still suffers from poor visibility. However, extreme integration could leverage the GPS of each driver to provide real-time location and insight into package movements and provide more accountability to consumers.
Integrated Final Mile Offers Key Benefits in Final Mile Logistics
Integrated final mile does offer significant benefits for both shippers and consumers. On the shipper side, integrated final mile through crowdsourcing can unlock the door to lower labor costs, reduced maintenance spend, and faster shipping. Since delivery drivers can be focused on a smaller volume of packages, delivery to the consumer goes faster, and the evolution of final mile logistics to include white glove services is the natural partner for this benefit. Think about it. Ongoing digital transformation within all industries has given rise to an array of smart products and benefits for consumers, and merely ordering a product online is not necessarily enough to put the power of a product to use.
Consumers may wish to have assistance setting up their electronics, installing merchandise, and moving heavy equipment. As a result, shippers can turn to crowdsourcing to tap into the value of an army of technicians and skilled experts to provide a comprehensive, satisfying experience to consumers. Of course, final mile logistics integration will require the infusion of technology within the final mile, such as GPS tracking, providing insight into the exact movements of a delivery driver. This will effectively ensure consumers know when a product will arrive, reducing the risk of missed or late deliveries and without increasing the costs of the final mile delivery in the first place.
Deploy Final Mile-Inclusive Systems and Technology to Boost Profitability Now
Final mile is an opportunity to improve supply chain management and lower shipping expenses. Since the final mile is often the final stage of shipment planning, it gets overlooked. However, using a dedicated transportation management system (TMS) that considers final mile needs, especially for same-day deliveries, which constitute final mile in their entirety, can lower costs.