Developing Solutions For Freight Last-Mile Delivery

With the e-commerce business booming, numerous retailers depend on optimised delivery. And since the eCommerce industry is worth about $6.5 billion, it’s no wonder that so many people expect the delivery network to function flawlessly.

Last-mile or final-mile delivery is essential in the supply chain. That’s why it’s important to understand what this phase of the delivery operation means and how it relates to the transportation process.

Understanding The Delivery Process

There are three phases in the delivery process: first, middle, and last mile.

First-mile delivery is relatively simple: it’s the delivery process phase in which manufactured items are distributed for further shipping. In other words, this is when the manufacturer sends their goods to a delivery service.

Middle mile refers to items transported over longer distances. This phase may include freight delivery (inland, ship, or aeroplane transport), customs, storage, and loading. Most of these elements will be present when shipping internationally, while the phase might be more straightforward for domestic delivery.

Finally, the last mile is the phase in which the customer receives the ordered item. In this phase, the shipping company transports the item from its fulfilment centre or a local warehouse.

While each phase has its challenges, the final mile delivery impacts the customer the most. This is when the customer is ready to receive their order. That’s why late deliveries or damage during transport may result in a poor customer experience.

Last Mile Considerations

Surprisingly, last-mile transportation is the most challenging part of the delivery network. Despite being shorter than the middle mile, this phase can be the costliest, often making up more than half of the total expenses.

The challenges here range from timing to additional fuel costs. Customers expect their items to arrive as soon as possible once the order is at the last mile stage. For that reason, many facets of the delivery service need to be coordinated to meet those expectations.

Typically, this delivery phase requires flawless warehouse management, since the warehouse is the starting point. It’s crucial that the items are forwarded on schedule from here to the holding facility.

The ordered items begin their actual journey from the holding facility. At this point, fleet management needs to take over. Automated delivery solutions are often used to make the process more precise and resolve a slew of potential issues.

For instance, planning the best route is a particular challenge due to the sheer number of factors that need to be considered. These include fuel consumption, delivery locations, and timing.

Let’s break down these factors further.

During final mile delivery, vehicles transport items to multiple customers. Vehicle routing needs to account for individual locations and times when each customer expects to receive their orders. All this impacts fuel consumption – a poorly planned route will result in higher fuel expenditure, making the route costly.

Automatization and AI technologies allow for better route optimisation. With precise vehicle routing, delivery can be exact and on time, leading to increased customer satisfaction. On the other hand, transportation companies lacking advanced solutions will struggle to make their services more efficient.

Package tracking is also an important factor in final-mile delivery. Each order needs to be scanned for tracking purposes and the customers need to receive tracking data in real time. This ensures that the recipients have reliable information about their delivery. As a result, proper package tracking helps avoid confusion and makes the process more straightforward for the customer.

Biggest Challenges in Last Mile Transport

Certain challenges of last-mile on-demand delivery aren’t easy to resolve through basic means of carrier management, package tracking, or other standard means.

Particular areas that make transport more complicated are prime examples of such issues. For instance, vehicle routing through urban areas is notoriously difficult. Even with the help of real-time GPS software, navigating the narrower downtown streets presents a considerable challenge, as these areas are also prone to traffic jams.

Worse yet, downtown areas are a nightmare in terms of parking. This factor, along with the mentioned issues, may cause delays in delivery, especially compared to the much more manageable suburban areas.

In contrast, rural areas represent a challenge due to different spatial issues. While urban centres are densely packed, the rural landscape presents the opposite: vast expanses of empty space.

The issue that fleet management and drivers can encounter here is the sheer distance between the stops. This factor may increase travel and wait times significantly, and it’s a problem that even advanced automated delivery systems can’t tackle effectively.

The next issue with on-demand delivery is that there are few limitations on what customers can order. Transported items may include massive objects that require multiple people to handle. From the carrier management side, this means more time taking care of the logistics.

Finally, last-mile transport relies on a specialised workforce and equipment, i.e., vehicles. Unfortunately, both can be problematic.

Competent drivers are in high demand, but the transport industry is facing a severe shortage of qualified personnel. This trend isn’t recent either – it was prevalent before the pandemic. Self-driving vehicles may provide a solution, but the technology isn’t yet widely accepted or developed enough to be considered feasible.

In terms of vehicles, the issue is whether companies need to purchase or lease them. Weighing the options can be difficult since demand trends fluctuate. Purchasing a vehicle fleet could present a serious budgetary impact, while leasing might fail to meet increasing demands.

A Balanced Approach to Last-Minute Transport

Transport companies need to find scalable and sustainable solutions for common industry issues. Advanced AI technologies for management and package tracking are one part of the equation, while the other part includes budgetary and personnel considerations.

It’s worth noting that going to the extremes on either side could prove detrimental in the long run. That’s why experienced shippers focus on striking a balance between the available options.