Final mile continues to change. E-commerce growth and final mile logistics gave rise to an increase of more than $1.35 billion in the final mile logistics space. As shippers look for ways to boost profitability and increase customer service, final mile would seem to become the gold mine. However, the final mile remains the part of shipping with the highest risk for failure, especially following failed or missed deliveries. Fortunately, shippers that take the time to understand how a TMS unifies OTR shipping modes can finally crackdown on final mile costs.
The final mile is expensive. Shippers must move products from suppliers to the warehouse. Once in the warehouse, packages are broken down, re-consolidated and otherwise put away, for shipping to the brick-and-mortar store. Each movement of a product represents an added cost in the supply chain, and all touchpoints increase the level of risk for damage, lost packages, and even theft. Now, with that in mind, consider the costs associated with moving a package from any of those locations to the customer’s doorstep. Labor costs increase, shipping costs exist, and delivery drivers only have so much time. If the package is not delivered on time, customers may return it, and with returns rates of e-commerce upward of 30%, any unnecessary return is a tragedy in supply chain management. Yes, the final mile represents the most expensive aspect of supply chain management and shipping, but a unified TMS may be the solution.
Take a moment to think about what a unified TMS really means for the industry. A unified TMS considers all modes of shipping and management both independently and as a whole to keep costs down and improve speed to market. In other words, complex supply chain functions continue to grow to meet the rising demands of consumers, especially in the world of e-commerce. A unified TMS must connect the dots from a product’s origin to its destination, and the process gets even more complicated from there. At the end of a product lifecycle, what happens to it? Electronics may require recycling, and if an item breaks, how does a consumer get a replacement? If the item is covered by warranty, how does the supply chain handle the damaged item? Those questions reflect the various way a TMS can provide end-to-end visibility and a means of managing the whole supply chain.
Now, every vendor will claim their TMS is the best and biggest solution, capable of handling any need. Unfortunately, not all platforms are created equal, and hasty decisions will result in added expenses in final mile management. To ensure your TMS can genuinely handle all actions from inbound to final mile, look for a TMS that offers control of these critical areas:
Final mile logistics management is the latest horizon for supply chain management. Efficiency in any part of the supply chain will fall short if the final mile fails. At the same time, the reverse is accurate, and shortfalls within inbound logistics will contribute to a higher risk for missed or late pickups and deliveries. However, advanced TMS capabilities that truly manage all supply chain needs from inbound shipping through delivery, as well as installation and removal of old merchandise, will increase profitability and efficiency. One thing is certain. Final mile logistics must come to the forefront of shipping through advanced, unified TMS capabilities.
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