Today, while consumers turn to e-commerce for all their shopping needs, fast delivery is no longer seen as an extra-satisfying feature. What is expected from every internet shopping made is that the delivery can be made in a very short time. That’s why it’s become a priority for logistics companies and retail partners to take action to get ahead of the growing power of Amazon Prime.
As a result, businesses began competing to develop new technologies and experimental supply chain models to increase parcel volume, speed up deliveries, and delight customers while working to reduce costs. Last Mile Logistics, on the other hand, is one of the biggest expenses and difficulties.
What is Last Mile Logistics?
It is the “Last Kilometer” of delivery and the last step of the process in the journey of a product from the warehouse shelf to the customer’s door. At this stage, the package finally arrives at the recipient’s door. Besides being a key to customer satisfaction, Last Mile Logistics is both the most expensive and time consuming part of the shipping process.
What is the Last Kilometer problem?
If you have followed the process of moving a package over the Internet and have seen that it is in the ” out for distribution ” stage, which feels like it will take forever, then you have experienced the inefficiency of last mile transportation. This is because the last leg of a shipment typically contains multiple stops in the form of small drops.
In rural areas, there are delivery points scattered along a certain route, several kilometers apart, where one or two packages are dropped off each. In cities, the picture is not better; Delivery points are too often dispersed and traffic delays occur before any delivery takes place.
The costs and inefficiencies of the last mile issue have become more apparent as e-commerce becomes more prevalent in US retail sales. This situation causes daily delays in deliveries and failing to meet increasing customer expectations. Meanwhile, customers expect deliveries not only to be fast but also free of charge.
How much does Last Mile Logistics cost?
Last Mile Logistics corresponds to 53% of the total transportation cost . Also, with ” free shipping ” becoming more and more common, customers have become more reluctant to pay for delivery. In this case, customers are forcing their retailers and logistics partners to bear this cost. Therefore, the application of new technologies and supporting process improvements are of great importance for last mile logistics.
Technology solutions to improve Last Mile Logistics
With the spread of the gig economy, many consumers have learned about the concept of using local services through digital platforms such as Uber, Airbnb and Postmates . Location-Based Crowdsourcing , consumers using mobile applications; It allows you to plan short trips, book accommodation, order coffee for the office, hire someone to set up a television, order flowers for a special person, and even schedule the delivery time before you leave the house.
The crowdsourcing model has been used for some time in transportation, accommodation and food distribution and is becoming increasingly common. Retailers are also following this model closely to improve customer experience and reduce Last Mile Logistics costs.
With crowdsourcing technology , retailers, logistics partners and consumers can directly connect through local, non-professional couriers who use their own means for deliveries. In this way, companies can deliver orders to customers faster. Customers can also receive their products whenever and wherever they want. The freedom to make on-demand and scheduled deliveries allows customers to receive their products at home, without the need for second or even third visits.
With the increase in the ongoing integration and automation studies between the sectors, the deliveries made by robots, drones and driverless vehicles may soon be a part of our lives.