A common problem in today’s growing economy revolves around final mile delivery. Up to 25% of customers are willing to pay a surcharge for same-day delivery, and up to 25% of all shipments will qualify or be expected to make it to a person’s home within the same day by 2025. In 2018, final mile logistics rose in value to more than $1.35 billion, and as e-commerce continues to grow, the cost of final mile of logistics will wax. The rising tide of final mile and white-glove service reflect a 10% annual growth rate. Shippers need to understand how a TMS from final mile and white glove services can indeed extend options to the final mile and exceeds customers’ expectations.
Final mile logistics and white-glove service refer to the last stage of delivery, such as moving a shipment to its destination on the last leg of the journey. In other words, final mile logistics take place when the shipment is loaded onto the last delivery van or truck before it arrives at a customer’s home or business.
On the other hand, white-glove service takes the actions of final mile and steps them up a notch. White-glove services are typically used when an item requires additional care during shipping, reflecting the need to touch and handle the item as if it required shippers use “white glove” to prevent damage or undue harm to the shipment. A grand piano would be an example of an item acquiring white-glove service. Now, white-glove service can be complicated in today’s world. It includes the initial delivery and set up, provided set up is relatively light, such as unpacking an item from its shipping rods or packaging, and depending on the carrier, it may include the setup and installation of your freight.
The challenges in final mile logistics are reflective of the unique needs that customers may have in receiving freight to their home address that goes beyond a traditional package. Certain products may require specialized delivery planning, including routing of a package to its final location so that it does not present a risk to power lines, or otherwise damaged property. Going back to the piano example, consider how a piano may need to be moved from the ground floor to the 25th floor outside of the building. This is an extreme example of final mile and white glove service, but it is the perfect example. This is where the managing of final mile service comes into play, and common challenges include:
The core functions of a transportation management system platform focus on real-time freight rate visibility, comparison of rates between carriers, consideration of different freight shipping needs, and the ability to review past shipments for errors. These functions are essential to every shipping operation, but as companies expand, it can be difficult to track each shipment’s departure. A TMS for final mile logistics leverages the traditional power of a TMS, including real-time freight rate visibility, consolidation freight practices for multi-modal shipping, add-on services for freight and even white glove and final mile delivery. More importantly, the TMS is the system of record for the entire shipping journey, and as customers begin to exert their influence over final mile delivery for faster, more natural methods of transportation, such as those seen when Amazon released Amazon Key, more shippers will look for ways to increase rate visibility into final mile services.
Shippers can continue operating without a true final mile delivery strategy for now, but Amazon and the world’s major retailers are working tirelessly to create the ultimate, customized experience for customers when a shipment reaches its destination. Instead of leaving it up to chance, shippers need to act and gain real-time visibility into final mile logistics to push savings to their highest potential and ensure customers get exactly what they want. Are you still not convinced, remember this; customers purchasing from Amazon can also, at the same time of purchasing the item, pay for, schedule and review a licensed installer that will arrive at the time of delivery to install it. Therefore, more companies are looking to final mile and white glove service as the go-to solution for better customer service.
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