Take a moment to think about the state of last-mile logistics in the last year. An argument does exist for the continued support of last-mile innovation and a relentless push to build better customer experiences within the final mile. Unfortunately, supply chain professionals can get so wrapped up in the logistics of the final mile, pardon the pun, that they failed to recognize innovation and its true potential. While this series of posts and white papers have already explored some trends for last-mile logistics in 2020, let’s revisit the conversation with an additional seven trends to be on the lookout for in the coming year.
Organizations that take a digital-first approach to last-mile service will grow in value throughout 2020. Digital-first companies recognize the potential of Tech-enabled capabilities, and digital transformation lies at the cornerstone of all their decisions. These companies deploy platforms to gain transparency and understand shipping quotes, and much more. As explained by the Logistics Bureau:
“A new generation of tech-enabled freight forwarders [and other supply chain entities are] competing with incumbent shipping giants to capture the hearts and minds of smaller enterprises. They are deploying platforms that make it easy to get transparent and understandable shipping quotes, book ocean freight and airfreight shipments, complete and submit shipping and customs documentation, pay for transportation, and track international shipments in real-time.”
Since last-mile is heavily reliant on the perception of high-quality service for customers, digital-first companies will naturally have an advantage in connecting with customers before the delivery, validating the delivery, and offering service after delivery.
Another common component of modern last-mile service involves the breakneck speed at which final mile logistics takes place. Now, obviously light speed logistics does not exist, but the ability to transform logistics through improved efficiencies within the last mile will lend itself to improve the speed of delivery. Moreover, customers have access to more information and capabilities to interact with delivery drivers than ever before. As a result, major entities, including Amazon, have launched innovative last-mile services to connect with customers and reduce potential delays, such as customers that are not home at the time of delivery. This will be a dominating trend throughout 2020, especially as the state of the global logistics industry evolves in the wake of the coronavirus.
Final mile has always had a degree of limited technology. Yes, each delivery scan triggers a notification to a customer, but that information has been relatively internalized and kept in the purview of the carrier’s eyes only. Carriers have not traditionally shared that information, and even the sole carrier that offers last-mile tracking through real-time tracking of delivery vehicles, i.e. UPS, has limited access to that technology. In the coming year, expect increased use of real-time technologies and capabilities to track delivery drivers within the final mile. This will be among the leading trends in last and final mile logistics, and it will serve as a kickoff point for subsequent improvements in the supply chain.
The enforcement of IMO 2020 new rule will have an impact on the top trends in last-mile logistics too. As the world’s carriers look to cut costs and avoid the added expenses of the regulation, companies will increase ship size, resulting in additional problems with port management and even drayage. “IMO 2020, the United Nations’ International Maritime Organization (IMO) regulation that enforces a sulfur cap on the fuels used by marine vehicles in order to reduce pollution, has long tentacles. According to an Oct. 7 report by logistics and real estate services firm JLL, ship lines will deploy larger vessels to offset higher operating costs because an increase in ship size does not translate into an equal increase in fuel consumption (i.e., one ship holding 20,000 twenty-foot equivalent container units (TEUs) won’t burn as much as two 10,000-TEU ships). This could lead to landside paralysis as ports struggle to process massive volumes from the larger vessels, according to JLL.”
So, the problem becomes more complicated, forcing shippers to rethink the last-mile to the dock and how that will translate into potential delays in both distribution and the last-mile at the customer’s delivery address. As explained by FreightWaves,
While some organizations have been reluctant to adopt the use of blockchain, the application of the ledger-based “chain” will become a major differentiator in the market throughout 2020. Global entities, such as ShipChain, have already taken the steps necessary to build open-source blockchain solutions, and other companies, such as Maersk, have joined with tech giants, like IBM, to promote innovative blockchain capabilities. As blockchain becomes a larger part of the conversation, supply chain professionals will be forced to evolve.
Evolution within the supply chain and final mile will include a focus on improve sustainability. The final mile of logistics represents one of the most cost-intrusive aspects of supply chain management. As organizations look to improve sustainability through the long haul, the final mile will represent the greatest opportunities for improvement and savings.
Another of the final trends in last-mile logistics for 2020 will involve the blending between final mile logistics and reverse logistics. Final mile logistics represent the instance at which a customer may opt to return a product, so the final mile could theoretically become the first mile of reverse logistics. In addition, companies are looking for ways to reduce delays in returns management and improve reverse logistics, such as identifying damage-free products that could be simply repackaged and shipped, avoiding the need to restock items.
Shippers need to deliver on increasing expectations of customers and attain more successful last-mile deliveries. By aligning your organization with the trends in this piece, your company can attain success, build causative customer interactions, and derive greater value from your supply chain.
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