More consumers want faster, free delivery options from shippers. While new technologies, like drone delivery, big data analytics and the Internet of things (IoT) push the boundaries of traditional last mile delivery logistics, growing complexity continues to puzzle shippers. In addition, up to 30 percent of consumers are willing to pay premium prices on shipping for same-day and instant delivery, reports McKinsey & Company. However, growing demand for an omnichannel shopping experience, reflecting a seamless integration across multiple shopping channels, will require shippers rethink traditional last mile delivery logistics and understand how to address its complex pain points.
Why Last Mile Delivery Logistics Are Critical to Omnichannel Supply Chains
Omnichannel supply chains are about being able to get products to consumers through the consumers’ preferred shopping channels, including a blending of existing channels, such as using site-to-store, ship-to-home and locker pickup. As a result, last mile delivery logistics no longer comprise the last mile of sending a package to consumers’ homes. Last mile delivery may include the multiple steps and the final leg of the journey from an shopping platform, such as an app, browser, catalog, call center, in-store location or other mobile device, to a brick-and-mortar store, alternative pickup location or in consumers’ homes, reports DatexCorp. Therefore, shippers must be able to control to blend last mile with other shipping strategies.
How Shippers Deliver on Last Mile Expectations
Each leg of the journey could include last mile delivery logistics, depending on how close the product is to its destination. However, consumers’ experiences are the cornerstone of successful last mile delivery logistics, and shippers need to revolutionize their last mile delivery logistics strategy to meet these expectations. Since both business-to-consumer (B2C) and business-to-business (B2B) shipments may be involved in last mile logistics, shippers should take the following steps:
1. Give Consumers Options for Pickup
Shippers have a tendency to panic when trying to figure out the best way to get products to consumers, but the process can be simplified by giving consumers options to pick up products at various locations, including through the United States Postal Service (USPS), as explained by Carrie Mantey of Supply and Demand Chain Executive. Essentially, rerouting packages sent to consumers through omnichannel supply chains to USPS eliminates the costs and burdens associated with creating standalone pickup locations.
For example, Amazon has successfully created online order pickup locations, but the costs of building a location and maintaining it can be high.
However, it is only a matter of time before more carriers and shippers start using this strategy for controlling packages’ last mile delivery. Consumers should also have options to pick up packages in brick-and-mortar locations or have packages delivered to their homes.
2. Autonomous Trucks and Drones Are Not Critical to Today’s Last Mile Delivery Logistics
While much talk has been introduced to the supply chain landscape revolving around autonomous vehicles and trucks, including drones, for the use of last mile delivery logistics, true deployment of such technologies throughout supply chains aren still in infancy. However, computer-controlled delivery trucks and drones will eventually impact last mile logistics in profound ways, but it is not happening this year. Shippers need to recognize the forthcoming use of driverless technologies for last mile delivery by connecting their existing systems through the IoT. This will put existing operations in the best position to rapidly integrate drone delivery in the future.
3. Growing Demand for Last Mile Delivery Logistics Requires Increased Scalability
Part of the problem with today’s last mile delivery logistics complexity derives from the increased pressures on shippers’ inability to handle rapid increases in operations, explains Deborah Lockridge of Truckinginfo. In other words, shippers need to enhance processes required for increasing scalability, which will allow for fluctuations within existing e-commerce platforms, as well as other changes throughout omnichannel supply chains.
Shippers should also explore options available through third-party logistics providers (3PLs). 3PLs allow shippers to rapidly expand or contract operations to meet current demand, and well-established 3PLs have the technology and resources necessary to provide a systemwide integration and collaboration to boost overall scalability and meet the challenges of creating and managing an omnichannel supply chain. This is especially important during peak shopping seasons, such as the holiday shopping season or the back-to-school rush.
4. Parcel Auditing Can Improve Last Mile Delivery Logistics
As explained in a previous blog post, the use of parcel auditing is tantamount to cutting costs throughout supply chains, especially when a shipper is moving more than 10,000 parcels. In fact, one of the most effective ways to successfully manage parcel auditing remains outsourcing. But, shippers may still not understand how parcel auditing plays into building a successful omnichannel supply chain strategy, improving accountability in last mile delivery logistics, asserts Edwin Lopez of Supply Chain Dive.
Parcel auditing services quickly review all existing parcel shipments for inaccuracy, delays, errors and opportunities. Since many of the services are automated, parcel auditing also leads to the creation of large sums of data, which can be leveraged to understand both gross and fine movements within omnichannel supply chains. Last mile delivery logistics is inherently filled with small packages and parcels. So, pairing parcel auditing services with shippers’ existing operations can benefit last mile delivery logistics and reduce their costs.
5. Use Machine Learning to Improve Last Mile Delivery
Machine learning is the symbiote of the IoT. In other words, machine learning uses connected devices to gain new insights into standard operations, allowing shippers to reroute shipments and alter processes to reach new heights. As advanced algorithms and analytics become ingrained in today’s omnichannel supply chain strategies, the complexities within last mile delivery logistics will increase. However, shippers will have an easier time navigating their systems and managing the flow of products from manufacturers to end-users.
The Big Picture
Shippers that forgo understanding the complexities in today’s omnichannel supply chains will face tremendous pressures and the possibility of bankruptcy. However, modern technology is making understanding consumers’ demands easier, and predictive analytics are on track to know what consumers want before ever clicking “Checkout.” The use and importance of last mile delivery logistics cannot be overstated, and last mile operations will continue to grow in both importance and complexity. As a shipper, you need to follow these steps and help your organization thrive as omnichannel becomes the new gold standard of shopping and shipping.