Logistics companies are now investing in last-mile delivery software so that they can deliver on their promise of cost-effective and speedy delivery of orders to customers.
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Recently there has been a revolution in consumer behavior, especially regarding ordering online. The consumer expects cheap or even better free and super fast delivery.
Emphasis on words: Cheap and fast delivery.
This forms the core of last-mile delivery. It is considered to be the most crucial and yet the most difficult part of the whole supply chain. This is because it connects businesses to their customers. So it needs to be faultless and as smooth as possible.
And it is only possible when logistics companies resort to using Last-mile delivery tracking software, which not only helps to guarantee safe and timely delivery but also ensures minimized cost of operation.
Read this interesting blog to learn everything there is to know about last mile delivery.
What is Last-Mile Delivery?
Last-mile delivery refers to the last step of the logistics process. It begins when the parcel or products are scanned and picked by the delivery agents to be delivered to the last destination – either to customers or retail stores.
It constitutes the most crucial step in the delivery process and happens to be the most expensive leg of the supply chain. Businesses like e-commerce, food delivery, and retail want it to be the quickest and smoothest along with complying with the demands of the customers.
What are the Steps Involved in Last-Mile Delivery?
Let us view how last-mile delivery works from the perspective of e-commerce, to get a better understanding. The process can be broken down into five steps:
The first step involves scanning and digitally entering orders into the central system. Though it is not part of last-mile delivery. This allows the consumers to track and monitor their order status through tracking ID.
The second step includes orders arriving at the transportation hub or the last warehouse. This is where the last-mile delivery truly starts, as the orders will start being dispatched.
The orders are strategically sorted and assigned to delivery agents in the third step. The agents are given recipient addresses and are briefed about the optimized routes. This is essential for an optimized, cost-effective last-mile delivery operation.
Fourth step consists of orders scanning and loading into the delivery vans and bags. This scanning is essential as it updates the order status for the sender and the customers. This also reduces the chances of the packages getting lost on the way.
In the final step, the package arrives at its final destination. Then the delivery agent confirms the delivery through various methods, such as OTP, QR code generator, e-Signature, etc. This proof of delivery is essential as it verifies and ensures that the delivery has been made and the process comes to an end.
Why is Last-Mile Delivery Important?
As said before, last-mile delivery is significant as it connects businesses with customers. Delivering a cohesive order-to-delivery experience is now the holy grail for retailers and other businesses globally.
The stakes are high in the last-mile delivery. A seamless last-mile delivery translates into brand loyalty. Conversely, an error-filled or delayed delivery can ruin the brand image and even cause them to lose consumers. To ensure this does not happen, companies are constantly pumping in money to find ways for smooth last-mile delivery.
According to research, 70% of consumers say speed, convenience, and friendly delivery service matter the most.
Price and product is no longer the most significant differentiating factor for companies for their services and goods. According to a survey, 87% of consumers said that favourable delivery method is the key factor in their decision to purchase from online stores. Providing customers with a delivery tracking facility, accurate ETAs, and out-for-delivery alerts allow brands to win consumer loyalty and retention. All this makes the experience of last-mile delivery all the more critical.
What is the ‘Last-Mile Problem’?
Now that you know how essential last-mile delivery is in the whole logistics process. But it is surrounded by challenges and problems like customers’ expectations for free and express delivery of orders. And the paradox is that allowing fast and free delivery only leads to added expenses.
It just takes one delayed delivery for customers to switch their shopping brands. This proves that companies cannot afford to disappoint them.
Multiple challenges constitute a ‘last-mile problem.’ Companies like Amazon have set the bar really high with their efficient delivery infrastructure.
The manual process comprising pen and paper and traditional phone calls to chart the delivery plan, receive updates, and manage the supply chain network has gone obsolete. As a result, it stands no chance of winning in the current global marketplace. Instead, today’s logistics operations demand and rely on GPS-enabled, cloud-automated software systems.
The rigidity and sluggishness of the manual process bring inefficiencies and increases the chances of errors in the supply chain network. For example, consumers now demand logistics companies be flexible with their delivery. If they are not available, the attempt for delivery should be reattempted. This is causing companies to rethink and reinvent their entire logistics process.
Fulfilling Customer Demands
Customer satisfaction is essential if a business wants to thrive. Higher customer satisfaction automatically translates into an increase in sales for the business. But it comes with tackling their ever-changing demand.
Companies often have to pay extra from their pocket to meet their expectations. Logistics businesses’ biggest challenge might be making this step as smooth as possible without compromising the customer experience.
Sending each order to its destination involves a huge undertaking for businesses.
The drivers or delivery agents must battle traffic, parking, and the most difficult – finding the address. This is causing businesses to opt for last-mile delivery software to get their products to consumers as effectively as possible.
Unpredictability in Routes
Though logistics companies always replan their delivery routes, you can never be 100% sure whether the delivery will be smooth. Chances are that the agent might face heavy traffic and road blockage, making it difficult to reach the destination on time.
Another instance can be that the companies or delivery agents fail to maintain their vehicles. Again, this increases the chances of unprecedented breakdowns while en route. In addition, products like food or flowers might not remain as fresh due to delays.
Lack of Real-time Visibility
Missing transparency and real time visibility can prove to be one of the major last-mile problems. Customers want to be in the know when it involves their purchases. Traditionally logistics companies provided consumers with tracking IDs to give information on the delivery status.
But with advancements in technology, tracking codes are just not enough. Instead, customers need full disclosure of the whereabouts of their orders, details of the delivery person and the exact ETA.
Inefficient Route Planning
Lack of proper route planning is the prime cause of delayed deliveries, higher costs, and frustrated customers. Scheduling even twenty deliveries in a single shift is almost impossible without route optimization.
Logistics companies that rely on manual planning with the help of spreadsheets make the job of agents and managers more complicated. Maps are unreliable route planners, and neither do they provide last-mile assistance. That is why companies must invest in software that provides route optimization solutions.
How Can Last-Mile Delivery Software Help Mitigate These Challenges?
There exists technology and solutions that can either solve the challenges or can eliminate them entirely. For example, last-mile technology is responsible for businesses across industries that are now able to cater to their customer’s demands and expectations holistically.
The need to adopt this technology is driven by the need to boost customer satisfaction, optimize operations and costs, and eliminate dependence on unreliable third-party apps. In addition, it enables logistic companies to adopt agility without compromising efficiency and customer experience.
The foremost thing to do is to set and assign targets and the number of deliveries each delivery agent needs to make. The last-mile software helps you to do so with ease. Through automation, the deliveries get auto-assigned. Even the volume of orders gets evenly and accurately divided along with presenting rider-order combinations and optimum routes. Not only this but managers have the privilege of tracking the real time status of the number of a delivery done by the agents so far.
Using the dispatch management solution allows you to plan deliveries and volumes of orders and smartly assign them across. This involves allocating deliveries according to the vehicles and route to be undertaken.
An important part of dispatch management is route planning and scheduling, which is discussed in the next point.
Route planning and Optimization
Since consumers demand fast and cheap deliveries, the only possible way for companies to achieve that is through route optimization. The last-mile delivery software offers route planning and optimizing solution which takes into consideration the distance, capacity, and fifty other factors and helps to plan the best route possible for deliveries.
This way, the delivery agents will be able to avoid traffic and deliver orders on time with the highest productivity. This allows the companies to cut down on fuel consumption and expenses, decrease delivery time, and manage huge volumes of orders efficiently.
Live Tracking/ Providing Live Updates
When your customer fails to know the order’s status, it leaves them feeling frustrated, especially during unpredicted events when they cannot determine the cause of the delay. They might even consider cancelling their order.
Providing them with live tracking with timely notification will help you build their trust in your services. Also, this is necessary as it makes it easy for managers to determine the whereabouts of their employees and gain visibility of the on-ground activity.
ETAs and POD
ETA is essential when it comes to last-mile delivery so that the consumers are aware that their orders are either out for delivery or are reaching their location. Giving a heads-up can help them prepare cash if the order is COD and eliminates the need for reattempted deliveries.
POD or proof of delivery is integral to last-mile delivery. First, it confirms the safe delivery of the consignment, and second, it improves transparency and communicates order fulfilment. The software automates this process by offering four different methods of POD – automatic, OTP, e-signature, and QR code scan through the agent’s app.
Reporting becomes essential as it helps identify the weaknesses and shortcomings of the operation and the areas for improvement. For example, the last-mile delivery’s analytical reporting system allows you to monitor key metrics like success rates, on-time delivery, failed or reattempted deliveries, distance traveled, etc.
Using the analytical reports aids in decision making, planning delivery routes, and managers get an overview of the success of the strategies employed. These reports play a vital role in helping logistics companies scale.
Last-mile delivery technology comes with a rider app, which is a game changer. Through it the delivery agents get access to data and features that are time saving and helpful in delivering orders. The app consists of task-related data. All information on their delivery route to address is available on it.
It even has an inbuilt chat box that allows them to connect with their in-office staff in case of any query or difficulty completing their job. Through the rider app, the agents are able to work lucratively.
Benefits Of Adopting Solutions For Last-Mile Delivery
Over time, the delivery industry has seen technological advancements that have worked in its favour. Technology like automation, artificial intelligence, and telematics has smoothened out a lot of wrinkles in the logistics industry’s processes.
Because of current technology, last-mile delivery businesses can access solutions that enhance their work process. These solutions can yield benefits like augmented productivity, reduced expenses, etc.
Shortens Delivery Time
Logistics companies lose business due to delayed deliveries. But through route-optimizing solutions, courier companies can chalk out the fastest and least congested route for delivery. This shortens delivery time, thus leading to customer retention.
The digitalization of the last-mile delivery process has improved the quality of service and enhanced its affordability. Optimized route, live updates, and driver behavior monitoring helps to eliminate time and cost-inefficient habits of the delivery agents like idling fuel pilferage, and reckless driving.
Many logistics companies are now resorting to using last-mile delivery technology to keep tabs on the movement of orders. And the same facility is being provided to customers who, too, can track their orders in real time. In addition, logistics companies track consignments and delivery agents for visibility and accountability.
Better Customer Service
Fast and cheap, and smooth delivery are responsible for customer satisfaction. With the help of technology and software, all these parameters are easily met. It is only due to the advancement in technology customers are able to gain end-to-end visibility of their orders. This transparency has a positive impact on brand and consumer relations.
How Has the Delivery System Evolved Over the Year?
Over the years, the consumption and demand patterns of consumers have evolved. Back then, they were happy to wait for a week to receive their orders, but now they expect 10-minute door-to-door delivery. Let’s explore some forms of evolving and emerging forms of deliveries.
Quick commerce has been a game changer for the e-commerce industry. Through it the brands are able to offer the one-day delivery option or even less. Quick commerce relies on large warehouses, local vendors, and also micro fulfillment centers.
e-Commerce giants such as Amazon are leveraging this option to offer its consumers one-day or less than 24 hours delivery options. Time is the ruling factor in such kind of delivery system.
Hyperlocal delivery system involves delivering goods and products directly from the seller to the consumers. Geography is a prominent factor in this system. This is because it promises a 10-15 minute delivery, due to which geography becomes a restriction.
It requires a delivery agent to pick up the order from the seller or a warehouse and deliver it directly to the customer’s location. This type of delivery is done in a smaller geographical area within a few minutes or hours.
Businesses like Zomato, Expressbees, Blinkit, Dunzo, and Wefast that deal with FMCG products like food and groceries and same day deliveries require a flawless delivery system.
How is Hyperlocal Delivery different from Last-Mile Delivery?
To prevent you from getting confused, here is a difference between the two.
Time Taken for Delivery
The time taken for the last-mile is not less than 12-16 hours. You will receive a message stating that the delivery agent will deliver your order today. The time could sometimes be more than 16 hours, especially in metropolitan cities where the delivery agents have to cover more areas.
In hyperlocal delivery, the aim is to deliver the order either in a few minutes or a few hours, like 2-3 hours. This is because the geographical area to be covered is less than what it is in the last-mile delivery system.
The responsibility of delivering the orders in the last-mile is on the assigned agent of the courier company. A single logistics company carries out the end-to-end process.
In the hyperlocal delivery method, the order can be completed either by the sellers’ field employees or by the delivery company they appoint.
There is no delivery area restriction in the last-mile. The delivery agent delivers in a radius of up to 30km. The location of the central transportation hub determines the delivery area.
The delivery radius is way smaller in hyperlocal delivery. The maximum distance the delivery can be done is a 5-15km radius.
A range of products, like television, clothes, etc., can be delivered through the last-mile. There is no restriction in the product category.
The delivery of fresh food or FMCG products is only possible with the hyperlocal delivery system.
Last-Mile Delivery With TrackoMile
last-mile delivery is an integral part of the supply chain industry. But even some of the biggest names in this industry are struggling to be at the epitome of it, to be able to deliver that much-desired and wrinkle-less express delivery.
But the hurdles of this industry can now be mitigated through last-mile delivery software. The software is nothing less than magic as it lets you turn your dream into a reality of providing your consumers with fast and affordable last-mile delivery.
Ans. The average cost of last-mile delivery is $1.50 per mile, accounting for up to 53% of a product’s total shipping cost. This cost includes labor costs, fuel prices, cargo carriers’ costs, and the driver’s or delivery agent’s salaries. Therefore, a failed delivery only adds up to this already expensive process.
Q2. How to make last-mile delivery more effective?
Ans. Logistics companies are desperately seeking ways to optimize their last-mile delivery process. And in the process of doing so, they have to battle problems like consumer demands, delivery agent shortages, and adverse economic conditions. To win these battles, the companies should adopt some practices:
Implement strategies and audacious plans in place.
Hop onto the latest technologies.
Use Analytical reports to gain insights into the operation and consumers.
Automate Mundane tasks.
Invest in Last-mile delivery software.
Q3. What are the upcoming trends in last-mile deliveries?
Ans. Here are some of the last-mile delivery trends to keep an eye on in 2023:
Smart technology for tracking
Robotic and drone deliveries
Undertaking steps toward sustainability
Q4. Are the last-mile delivery solutions to the changing supply chain market dynamics?
Ans. Customers’ demands and consuming habits are everchanging, and the pandemic is a prime example. Last-mile delivery software solutions are designed to allow businesses to quickly analyze, adapt, and respond to the ever-changing market dynamics.
Tithi Agarwal is a Jr. content writer at TrackoBit. She enjoys writing blogs which are knowledgeable yet fun to read. And when she is not typing away to glory she has her nose buried in books.