The face of shipping continues to change as e-commerce logistics grow more aligned with what customers want. It’s difficult to imagine modern retail or any supply chain without the last mile, but its costs continue to result in higher freight spend and delays. Shippers clearly need last mile strategic value—a way to connect the final mile, such as using a transportation management system (TMS), with the whole supply chain to exploit its opportunities for improvement. Unfortunately, that is a tall order. And, supply chain executives struggle to find and deploy workable last mile solutions that add value.
Final Mile Management: A Shipper’s 30,000 Foot View
Why Poor Last Mile Strategies Contribute to Higher Freight Spend
Finding opportunities to add last mile strategic value are not just difficult to locate. They are immensely troublesome to solve. It’s easy to claim a need for more transparency and logistics visibility into every movement in the final mile, but how? GPS data is great, but what happens when the signal drops? What happens if the truck suffers a blow-out? These challenges arise all the time, and a poor last mile strategy could lead to failure to secure alternate transit, inability to recognize which carriers fail to maintain their commitments, and much more. A poor last mile strategy is simple to recognize; it includes excess late deliveries, higher missed deliveries, negative customer feedback, and higher freight spend in the form of refunds and lost customers.
Using a TMS Enables Last Mile Strategic Value
E-commerce reshaped the standards of shipping and logistics management, and more companies have turned to the use of a TMS to add value in handling complex operations. But few operations are more complex and less visible than the final. Yes, the need for more e-commerce deliveries through parcel shipping in the final mile is essential. As reported by Talking Logistics, “a typical shipper five years ago was not necessarily thinking about parcel. That is not the case today. Many companies are adding parcel to their multi-mode mix to satisfy customer demands. The movement and delivery of small boxes in addition to typical freight has become a necessity for many shippers. Others have already shifted to high-volume parcel operations.”
Implementing a TMS that can handle multi-modal shipping helps companies better understand freight movements to squeeze additional efficiency from operations. Moreover, a modern TMS is built on the premise of efficiency and savings, so executives can focus on connecting more with customers and less with managing the shipment journey. Unfortunately, last mile strategic value is only going to grow more complicated as the last mile market expands 25% year over year through 2025, reports McKinsey & Company. So, how can a TMS really add value and improve the last mile?
Added Benefits of Using a TMS to Manage Last Mile
The use of a TMS with last mile strategic value means gaining more ability to handle swelling final mile needs. It provides a way for companies to secure more capacity and routes to move freight through the whole supply chain faster and with lower costs. In fact, the top benefits of using a TMS to increase last mile strategic value include:
- Connecting with more carriers.
- Diversifying your supplier relationships.
- Increased adherence to the inbound freight routing guide.
- Reduced delays resulting from poor optimization.
- Improved customer experiences.
- Access to managing final mile deliveries without a dock.
- Increased opportunities to understand last mile challenges and opportunities through analytics.
- Performance measurement of carriers to maximize profitability and encourage repeat purchases among customers.
- Integration with your e-commerce platform to streamline logistics management.
- Access to dropshipping and cross-docking fulfillment strategies that reduce carrying costs and other overhead expenses.
Reap the Rewards of Last Mile Strategic Value With a Comprehensive TMS
Supply chain executives need more controls and capabilities in managing the final mile. After all, the last mile is the most important and costly step of logistics. Using an advanced, last mile-inclusive TMS makes it possible to achieve those goals at a fraction of the cost of managing last mile in house. A TMS is now the cornerstone of successful last mile strategic value, and as a result, it is a must-have for any company involved in omnichannel ordering, curbside pickup, or any other fulfillment option. Even if your company sells only in-store, you still need a final mile strategy and solution for handling the last mile of your inbound shipments too. So, what are you waiting for in trying to build last mile strategic value? Now is the time to invest in a TMS.