Last-mile delivery – Why is it important, key challenges, and disruptive solutions

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Since the outbreak of the Covid-19 pandemic, the increased demand for online orders has made eCommerce companies rethink their strategies to improve last-mile delivery. This is because the final leg of shipment typically involves multiple stops with low drop sizes and is therefore the most time-consuming and expensive element in the shipping process. 

As a result, companies that streamline last-mile delivery through logistics and route optimization software experience significant benefits, including fuel savings, improved delivery ratings, reduced driver churn, faster delivery times, increased customer satisfaction, etc.

Companies that invest time and money to find a comprehensive last-mile delivery solution now will set themselves up for success in the future and reduce the amount of stress brought on by last-mile deliveries. 

What is last-mile delivery?

Last-mile delivery is the final stage of the delivery process. It means breaking down the bulk parcels into small deliveries from the main distribution hub. It is the most crucial part of the logistics chain, as it directly connects with the customers. Consumer satisfaction depends on the quality, safety, and effectiveness of the last-mile delivery.

Today, customers expect fast delivery at their doorsteps with minimum damage. The liability is on the logistics firms to provide safer, quicker, and more effective service to retain customers and improve their brand image.

The following data reveals the significance of efficient last-mile delivery:

  • 53% of the total cost of shipping comes from last-mile delivery.
  • The national gas price is quickly rising and has gone from $1.94 in April 2020 to $4.87 in June 2022. 
  • 63% of consumers choose online deliveries over physical stores to avoid overcrowded spaces.
  • 41% of consumers will pay extra if they receive deliveries on the same day. 
  • 81% of Millennials and 86% of Gen Z’s would think twice about placing an order again after a single poor delivery.

Last-mile delivery is preceded by first-mile delivery and middle-mile delivery. For a logistics firm, all these stages are very important. Each stage consists of a predefined route, destination, and schedule.

However, the last-mile delivery is more crucial than the other two stages. It plays a vital role in the logistics value chain and management. Therefore, it is ideal to depend on last-mile software, such as last-mile delivery management software, last-mile logistics software, last-mile delivery software, and route optimization to guarantee accuracy and efficiency in final mile deliveries.

Main challenges of last-mile delivery

Last-mile delivery remains a nightmare for logistics and e-commerce firms. It requires more manpower, effort, and time than any other part of the logistics value chain. It remains the most expensive due to the high shipping and transportation costs, salaries of operational staff, maintenance charges, rising fuel costs, etc. 

Customer satisfaction and loyalty to a particular brand is tightly bound to the efficiency of last-mile delivery. Customers are increasingly buying products online, and they have high expectations from logistics companies. They expect the final mile of delivery to be smooth, with real-time tracking. Consumers also choose products that offer same-day deliveries from transportation hubs.

These high expectations may seem daunting, but they also present an opportunity to delivery companies that rise up to meet them. Companies that use advanced last-mile logistics management software with routing and tracking capabilities can ensure quick, seamless delivery, which can lead to steady growth in today’s market.  

Why is last-mile delivery crucial for the logistics value chain?

Last-mile delivery in the logistics value chain ensures the smooth functioning and optimization of a supply chain operation by proper streamlining and simplifying. It also enables a firm to leverage its business by optimizing production and sales.

How can last-mile delivery enhance a logistics value chain?

Last-mile delivery directly deals with the value chain’s supply side. Therefore, it is the most visible part of a company because delivery directly engages with customers. Since it has a key role, it can decide the success of a product/business.

Why is last-mile delivery software essential?

Faster deliveries

eCommerce firms rely on customer satisfaction, and customers want faster deliveries. To achieve this objective, firms are implementing last-mile delivery planning through logistics software, like Beans Route, which directs drivers directly to a customer’s doorstep and provides accurate and precise apartment and rural navigation. This solution improves delivery speed to help retain and win more customers.

Increased efficiency

Last-mile delivery software greatly increases a company's efficiency. It works to improve fleet management, reduce failed delivery rates, improve time management, shorten dropoff and pickup times, etc. 

Improved visibility

Customer tracking is essential in today's market. Shoppers want to see where their package is to better plan their day around its arrival time, especially as more packages are stolen. Last-mile delivery software solutions can provide real-time tracking, which boosts customer satisfaction. 

Conclusion

Last-mile delivery software can set your company up for success during a time where many are struggling. Your company can become known as a fast and reliable delivery service provider. 

To see a demo of what premium last-mile delivery software can do, contact sales@beans.ai and request to see a demo of Beans Route. 

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