What is the last mile ?
We can define last mile, as the final order delivery process that an online store has , that is, when the package reaches its final buyer. This step happens from the last distribution point (that is, warehouse, store, specific center …) until you reach the place of delivery, for example, your home.
This process is the last step in the entire distribution chain and also the one that can cause the most problems, since getting to the end point is an obstacle course.
How many times have you had to wait longer than necessary to receive an order? Surely on some occasion you have even thought about not repeating your purchase.
This is because if this last delivery process is not completed satisfactorily, it can appear that all the administration and management of the purchase has been abysmal. So the prestige, brand and image of a company are at stake , hence the importance of this last step
What problems does the last mile run into
- When done in urban areas, there is always the risk of mobility problems such as traffic, jams, unloading spaces, forbidden streets, not finding the address …
- It has to be delivered in a short time , and they are usually always small packages.
- It is the most expensive step in the logistics chain, economically and environmentally, due to the amount of traffic it generates over the towns. If we carry out an analysis of the total cost of the shipment, the part corresponding to the last mile may occupy more than 50% of it . To this we must add that, currently, it is fashionable for the purchase to have free shipping
How can we optimize this last step?
Although it is one of the most difficult steps in the supply chain, good route planning could avoid many problems, despite all the unforeseen that may arise.
- Lighter commercial vehicles. The smaller the vehicle, the more mobile it will have.
- Optimized delivery routes. Carry out a preliminary design avoiding the areas with more traffic (closed streets, etc.).
- Pick up point. This method of purchase is being used more and more, where you have to personally go to a certain point to pick up your purchase. It can be at convenience stores, or at public lockers.
New solutions to last mile problems
They are constantly trying to find new solutions within technological advancement. Currently the search for companies that do fast shipping within the same city through digital platforms such as Glovo or Deliveroo, are one of the great attractions for many companies.
This new route allows many consumers, logistics companies and retailers to contact local deliverymen , who use their own means to fulfill the delivery.
Another tool that is growing more and more in this regard is the use of drones. In some countries, such as the United States or the United Kingdom, the Amazon company is already testing them to deliver packages.
In addition, drones already have other problem-solving uses, such as road surveillance, seed planting, event recording, among many others.
On the other hand, transport companies have begun to provide new facilities to the consumer such as the tracking number, so that the customer can know where their order is in real time.
What are the last mile delivery costs?
If we analyze the total cost of shipping, the part related to the last mill is substantial: it can amount to 53% of the total. And with the free shipping boom , customers are less willing than ever to pay a full shipping fee. This forces retailers and their logistics partners to bear a considerable cost.
For this reason, shipments have become one of the main links in the chain that companies review to implement new technologies and process improvements.
Technological Solutions To Improve The Logistics Of The Last Mile
With the rise of the Gig Economy, many consumers are already familiar with the concept of crowdsourcing local services through digital platforms such as Uber or Airbnb. Location-based crowdsourcing allows consumers to open a mobile app to request a car ride, reserve a room to sleep in, order coffee from the office, hire a handyman to assemble a television, send flowers to a special person, or even scheduling take away food to arrive just as they walk through your front door.
Crowdsourcing has already been established in transport, hospitality and food delivery for some time, and many retailers already consider it as an option due to its low start-up cost and the improvement of the customer experience that it represents in when it comes to last mile delivery.
With the technology developed by these crowdsourcing companies, retailers, logistics companies and the end consumer can directly contact non-professional local couriers, who use their own means of transport to make the delivery.
Companies can get orders to the customer faster, and the customer can receive their order whenever and wherever they want. This greater freedom in delivery encourages the end consumer to be home at the time of delivery, eliminating the need for a second (or third) attempt.