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How Last Mile Delivery Affects the Supply Chain

By Contributing Author | 11/26/2018 | 11:47 AM

By Inbal Axelrod, co-founder and CMO, MyRouteOnline

 

Thanks to the globalization brought about by connectivity and other technologies, it’s become easier than ever to ship products from one end of the world to the other. This doesn’t mean that there aren’t challenges to overcome when it comes to international or even local shipping, though. In fact, there’s still one last wild, untamed territory for shipping and delivery companies or for retailers that rely on these companies: getting that order delivery through the last mile.

What “Last Mile Delivery” Means

For the most part, shipping products have never been quicker or more cost-effective. The impact of high-speed freight rail networks and large-scale international container ships means that products can leave their point of origin and arrive at a distribution center in practically no time at all. However, when it comes to moving those products out of a distribution center and out for delivery to a consumer, either in a B2B or a B2C scenario, shipping systems become much less efficient.

Out of the entirety of the cost of shipping an item, this distance between the distribution center and the final destination — which has become known as the “last mile” — makes up around 28% of a shipping company’s expenditure. This is seen as a major problem for shippers and for both brick-and-mortar retailers and e-commerce sellers, not just for the increased cost but the lack of efficiency in ensuring that customers receive their orders as quickly as possible.

The Lack of Last Mile Security

The traditionally high cost and low efficiency of last mile delivery have long been a thorn in the side of anyone whose business relies on order fulfillment on a large scale. Finding better consumer delivery options is an especially important goal for many shipping companies and those that use them; with the number of deliveries that are made on a daily basis in the US to houses where the occupants are at work, the opportunity for theft is very high. In fact, 23 million Americans experienced package theft right from their front doors in 2016 alone.

Such a major problem cannot go unresolved. Consumers need to feel safe in ordering from e-commerce sites and having their packages delivered to their front doors. If last mile delivery providers can’t offer proper package security to these consumers, e-commerce sites that rely on package delivery could see a major negative impact if the trend continues, even though e-commerce delivery has distinct advantages for consumers when it comes to not having to shop in a physical storefront.

Finding Answers for the Problem

There are a number of ways to answer last mile delivery problems when it comes to security. Some of these, such as installing an electronic lockbox on your front porch, place the onus on the consumer when it comes to purchasing and maintaining the lockbox as well as ensuring that last mile delivery companies have the proper access code to deposit packages while no one is home. However, there are other options that last mile delivery companies have taken upon themselves to exercise.

In order to address the problem, some companies have given consumers the option to have their packages shipped to a secure location, such as the ship-to-store option that many large retail chains now offer. The UPS Store network, meanwhile, offers mailbox service similar to the PO boxes at your local US Post Office. E-commerce giant Amazon, often thought of as the industry leader when it comes to last mile delivery, also has their Amazon Locker kiosk system that provides security and automation for package delivery.

Quicker, Better Tracked Deliveries

Whether you’re making urban deliveries or your fleet of trucks is out in the suburbs, you can help solve last-mile delivery problems by incorporating the use of route planning software. Route planners help shorten delivery wait times by using state-of-the-art algorithms that analyze historical road traffic data before picking routes for your delivery trucks that are the most efficient. Because there’s fewer backtracking, delivery fleets spend much less on fuel, which further helps cut the cost of last mile delivery.

Additional benefits to integrated route planning are the ability to provide much more robust package tracking for consumers. Knowing when you can expect your delivery sometimes makes it easier to have someone return home to secure the package in order to prevent it from being stolen. In some cases, consumers can even choose the desired delivery window at checkout. The software then factors that request into its route planning and does its best to accommodate the consumer.

The Final Word on Last Mile Delivery

Sometimes it takes different applications of technology to make better and quicker last mile deliveries. In many ways, urban locations have some major advantages, as there are many opportunities to have packages delivered to a local store or a secure site for pickup. China-based e-tailer Alibaba is even testing its ability to deliver tea to customers in Beijing via drone in just an hour, just as Amazon is striving to shorten delivery times in metropolitan areas as well.

For consumers who don’t want to install an expensive lockbox on their front porch or brave the outside world to pick up their package from a store or other site, there is still hope. Using technology to provide better package tracking options to consumers or to make routing package delivery as quick and efficient as possible ensures that consumers of all stripes, whether they live in an urban setting or in a more suburban or even rural one, can benefit from the technologies being used today to make last-mile delivery faster and less expensive for everyone.

 

Inbal Axelrod is the co-founder and CMO at MyRouteOnline, a multiple stop route planner that helps make our world greener. Individuals visiting multiple locations can plan their routes online, optimize their route, and spend less fuel and time on the road. This means fewer greenhouse gas emissions, a reduced carbon footprint, and better air quality. Inbal can be reached at inbal@myrouteonline.com 

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Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.



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