To stay competitive in last mile delivery, companies need to prioritize factors such as accuracy, speed, and reliability when selecting delivery partners. Is your business knocking on the right doors?

With the increasing importance of customer experience in last mile delivery, the impact of last mile delivery on the overall supply chain and the role of e-commerce in shaping the industry’s future. This article explores the evolution of last mile delivery, its importance, the challenges it presents, innovative solutions, sustainability efforts, technology’s role, customer satisfaction, and its impact on e-commerce businesses.

Understanding Last Mile Delivery

Last mile delivery for most of us is literally the business of bringing the last leg of logistics to your front door. It’s the final leg of the product transportation process, where goods are transported from a distribution centre or hub to the end-user’s location, typically their home address. When you’re expecting a package, the last mile delivery is what gets it to your doorstep.

Also known as the final mile, last mile delivery presents significant challenges for retailers and logistics companies involving complex networks of rail, sea, road, and air transport that move billions of parcels around the world every year.

In addition, urban areas can be difficult to navigate, and rural locations may be far away from distribution centres, adding time and cost to the delivery process.

To enhance the customer experience, it’s crucial to streamline the last-mile delivery process, as it has a significant impact on the overall satisfaction of the customer.

When executed efficiently, delivery times improve, shipping costs reduce, and better yet, it creates a positive impression of your brand. To achieve this, companies often use advanced technology and real-time data to optimize their delivery routes and strategies.

Operational Elements

To better understand last mile delivery, consider the following elements integral to the process:

• Delivery vehicles: These can range from traditional vans or trucks to more innovative solutions like drones, electric bikes, or autonomous vehicles.
• Real-time tracking: Customers increasingly expect to be able to track the progress of their deliveries, adding pressure on logistics providers to offer real-time updates and precise estimated times of arrival.
• Flexible delivery options: Catering to customers’ needs by offering flexible delivery options like pre-scheduled delivery times or pick-up locations, can help improve the last-mile experience and increase customer satisfaction.

The efficiency of your delivery operations can make or break the customer experience. As a retailer or logistics provider, it’s essential to invest in optimizing your delivery process and keeping abreast of industry trends and advancements. By doing so, you’ll not only keep your customers happy but also maintain a competitive edge in the dynamic world of e-commerce and logistics.

Last Mile Delivery Market Size

Delivery Companies

Major delivery entities like FedEx, UPS, and USPS being highly visible in the last mile delivery landscape, work closely with retailers to transport goods from distribution centres to the customers’ doorsteps. These companies are continuously striving to innovate and improve their services to meet the growing demands of the eCommerce market.

In the larger scope, the global last mile delivery market size stood at $27.1 billion in 2022 and is anticipated to advance at a compound annual growth rate of 20.6% from 2022 to 2030, reaching $121.2 billion by 2030. To stay competitive in this market, delivery companies are investing in new technologies and exploring collaborations with startups and tech giants to find solutions to current challenges, such as congestion, route optimization, and same-day delivery.

Retailers

Retailers play a significant role in the last mile delivery process. As eCommerce sales continue to grow to an estimated $6.5 billion by 2023, retailers must continue to adapt their supply chain strategies. Some major retailers, such as Amazon, have taken on an active role in last mile delivery and developed their own networks, while others partner with delivery companies to fulfill their customer orders.

The Role of Major Delivery Companies

When it comes to last mile delivery, major delivery companies play a crucial role in ensuring packages are delivered efficiently and on time. In this section, we will explore the approaches of Amazon, FedEx, and UPS to last mile delivery.

Amazon’s Approach to Last Mile Delivery

As a leader in the e-commerce industry, Amazon has developed a unique approach to last mile delivery. One of their most notable initiatives is Amazon Prime, which offers customers free two-day shipping on eligible items. To accomplish this, Amazon has built a vast network of distribution centres and partnered with local delivery companies to ensure packages are delivered quickly and efficiently.

In addition to Amazon Prime, the company has also experimented with innovative delivery methods, such as using drones and autonomous vehicles. These initiatives aim to reduce delivery times and costs, while also improving the overall customer experience.

FedEx and Last Mile Delivery

FedEx is one of the largest delivery companies in the world, and they have a significant presence in the last mile delivery market. To improve their last mile delivery capabilities, the company has invested heavily in technology, including the use of real-time tracking and advanced route optimization software.

In addition to technology, FedEx has also developed partnerships with local delivery companies to help ensure packages are delivered quickly and efficiently. This approach has allowed the company to expand its reach and offer a range of delivery options to customers.

UPS and Last Mile Delivery

Like FedEx, UPS is a major player in the last mile delivery market. The company has developed a range of innovative solutions to help improve delivery times and reduce costs. One of their most notable initiatives is UPS My Choice, which allows customers to customize their delivery options and receive real-time updates on their package’s status.

To ensure packages are delivered quickly and efficiently, UPS has also invested in advanced route optimization software and developed partnerships with local delivery companies. This approach has allowed the company to expand its reach and offer a range of delivery options to customers.

Technology in Last Mile Delivery

In the last mile delivery industry, technology plays a crucial role in enabling efficiency and enhancing customer experience. As you navigate the evolving landscape, it’s essential to understand how these technologies work and how they can benefit your operations.

AI and Robotics

Artificial intelligence (AI) and robotics are transforming the way last mile delivery services operate. By integrating AI algorithms, you can optimize routes, reducing fuel consumption and improving delivery times.

Moreover, automation and robotics enable streamlined warehouse processes, ensuring packages are sorted and dispatched seamlessly. With technologies such as the Internet of Things (IoT) and machine learning, last-mile delivery becomes more efficient and better able to handle unexpected conditions.

Drones for Delivery

Drones are an innovative addition to the delivery ecosystem. They offer a faster, eco-friendly alternative to traditional delivery methods. By employing drones, you can bypass traffic congestion and reach remote areas more easily. They also reduce the time spent on each delivery, increasing overall efficiency. Implementing drone technology in your last mile delivery processes can enhance customer satisfaction by providing faster access to goods.

Autonomous Vehicles

Autonomous vehicles are an emerging trend in the last mile delivery sector. These electric vehicles can revolutionize the industry by drastically reducing fuel costs and lowering carbon emissions. As these self-driving vehicles become more prominent, they will also contribute to optimized route planning, further increasing efficiency. Integrating autonomous vehicles into your delivery operations can boost your business’s sustainability and responsiveness while catering to modern consumer demands.

Incorporating AI, robotics, drones, and autonomous vehicles into your last mile delivery strategy can significantly enhance efficiency and customer satisfaction. By staying informed on these advancements, you can make strategic decisions to improve your operations and stay ahead in the competitive market.

Challenges in Last Mile Delivery

There are various challenges that can impact your final mile operations – one of the most significant being traffic and traffic congestion. In heavily populated areas, increasing traffic can cause difficulties in maintaining speed and efficiency as your agents navigate through the roads, resulting in higher delivery costs and operating expenses.

Another concern is the fluctuating fuel costs, which directly affect your business’s bottom line. Any increase in fuel price can drastically raise your operating costs, forcing you to adjust your pricing model accordingly. A crucial factor to consider is the infrastructure, especially in remote or rural locations. Limited access and poor road conditions may lead to inefficiencies and delays, making it difficult for businesses to provide fast and reliable delivery services.

Solutions

One way to address these challenges is by optimizing your operations through route planning and delivery management. By carefully planning your drivers’ schedules and routes based on real-time traffic data, you can minimize delays and improve overall efficiency. By developing and maintaining a robust logistics network, you can adapt to fast-changing consumer demands and reduce the impact of challenges associated with last mile delivery.

Customer Experience in Last Mile Delivery

A significant aspect of customer experience in last mile delivery is setting realistic customer expectations. Ensure that you provide accurate delivery estimates and frequency updates to keep customers informed. Maintaining transparency in your operations helps build trust and results in a positive customer experience.

Communications

Effective customer communication plays a pivotal role – keep your customers informed with timely updates regarding their shipments, including any changes in the delivery time or unforeseen delays. By proactively addressing potential issues, you demonstrate your commitment to meeting their needs.

Order Tracking

Order tracking is another essential aspect of a successful last mile delivery strategy. Providing customers with the ability to track their shipments in real-time can significantly improve their experience. This transparency allows customers to plan their day and be present to receive the shipment, ultimately leading to greater satisfaction.

Real-Time Data

Utilizing real-time data is crucial for optimizing the customer experience in last mile delivery. By analyzing live information regarding shipment status, delivery routes, and driver performance, you can make data-driven decisions to enhance your delivery processes and meet customer expectations consistently.

Impact of Last Mile Delivery on Supply Chain

In the context of warehouse and distribution centre operations, last mile delivery directly influences the efficiency and effectiveness of your warehousing strategy. As goods move through the transportation hub, a streamlined last mile delivery system can reduce storage times and minimize stock-outs. This ultimately leads to a more optimized inventory management, allowing for faster order fulfillment and improved overall customer experience.

Warehousing, Distribution and Transportation

The impact of last mile delivery extends beyond the boundaries of your warehousing and distribution facilities. Given that last mile delivery accounts for a significant part of the total delivery cost, focusing on improving transportation operations can yield significant cost savings.

For instance, investing in advanced routing and scheduling software, exploring alternative delivery methods such as drones or electric vehicles, and partnering with local courier services can help reduce transportation costs while improving the speed and reliability of deliveries.

While consumers want their products delivered quickly, they may also express concerns over the environmental impact of fast deliveries. The trade-offs between speed, cost, and sustainability need to be carefully assessed, so you can make informed decisions that will benefit your organization and at the same time match your target customers’ sensibilities.

In summary, the impact of last mile delivery on your supply chain should not be underestimated. By focusing on this critical stage in the supply chain process, you can unlock opportunities to streamline operations, reduce costs, and enhance customer satisfaction.

The Role of eCommerce in Last Mile Delivery

Thanks in part to eCommerce, the demand for faster and more efficient delivery services has grown exponentially. Last mile delivery plays a crucial role in fulfilling your orders and has become a key factor in shaping customer satisfaction.

Critical Bottlenecks

eCommerce customers have high expectations regarding the delivery process. They want quicker deliveries while retaining the option to track your orders in real-time. Last mile delivery providers must overcome delivery bottlenecks and work tirelessly to meet these demands by adopting strategies that address critical factors such as:

• Delivery points
• Time
• Speed
• Value-added services
• Prices

In addition, customers’ needs become more diverse. For instance, some may prefer picking up a package from a designated location, while others insist on doorstep delivery. Offering flexible delivery options increases the chances of customer satisfaction and creates more opportunities for eCommerce companies to thrive.

The Future of Last Mile Delivery

Same-Day Delivery

Same-day delivery is becoming increasingly popular, and it’s no surprise why. Customers want their purchases as soon as possible, and same-day delivery provides that convenience. Retailers are investing in same-day delivery to stay competitive, and it’s expected to become the norm in the future. With the use of drones and autonomous vehicles, same-day delivery will become even faster and more efficient.

Optimization

Optimization is key to the future of last mile delivery. By using data analytics and machine learning, retailers can optimize their delivery routes, reducing delivery times and costs. Delivery companies are also experimenting with new delivery models, such as crowdsourcing, to optimize their delivery networks. In the future, we can expect to see more optimization strategies being implemented to improve the efficiency of last mile delivery.

Fast Delivery

Fast delivery is another aspect of last mile delivery that is becoming increasingly important. Customers want their purchases delivered quickly, and retailers are responding by offering faster delivery options. In the future, we can expect to see more retailers offering same-day and next-day delivery options, as well as faster delivery times in general.

Convenience

Convenience is a major factor in the future of last mile delivery. Customers want their deliveries to be convenient and hassle-free. Retailers are responding by offering more delivery options, such as in-home delivery and locker delivery. In the future, we can expect to see more convenient delivery options being offered to customers.

Overall, the future of last mile delivery is exciting. With the introduction of new technologies and optimization strategies, we can expect to see faster, more efficient, and more convenient delivery options in the future. As a retailer, it’s important to stay up-to-date with the latest trends and technologies in last mile delivery to remain competitive.

Frequently Asked Questions

What are some common challenges faced in last mile delivery?

Last mile delivery poses several challenges for logistics companies, including traffic congestion, unpredictable weather conditions, and the difficulty of finding accurate and up-to-date address information. Other challenges include managing customer expectations, coordinating multiple delivery attempts, and ensuring the safety and security of the package during transit.

How can last mile delivery be optimized for efficiency?

One way to optimize last mile delivery is by using route optimization software to create the most efficient delivery routes for drivers. This can help reduce delivery times and costs, while also improving customer satisfaction. Other strategies include using real-time tracking and analytics to monitor delivery performance, and leveraging data to identify areas for improvement.

What role does technology play in improving last mile delivery?

Technology plays a critical role in improving last mile delivery, with route optimization software, real-time tracking, and automated delivery systems all helping to streamline the delivery process. Other technologies, such as drones and autonomous vehicles, are also being explored as potential solutions to last mile delivery challenges.

What are some successful strategies for last mile delivery?

Successful strategies for last mile delivery include leveraging data and analytics to optimize delivery routes and improve performance, using real-time tracking to provide customers with accurate delivery updates, and offering flexible delivery options such as same-day or next-day delivery. Other strategies include partnering with other logistics companies to share resources and reduce costs, and investing in technology to automate and streamline the delivery process.

What are the benefits of outsourcing last mile delivery?

Outsourcing last mile delivery can offer several benefits, including reduced costs, improved delivery times, and access to specialized expertise and resources. Outsourcing can also help companies scale their delivery operations more quickly and efficiently, without the need to invest in additional infrastructure or hire more staff.

How can last mile delivery impact customer satisfaction?

Last mile delivery is a critical component of the customer experience, with delivery times and reliability playing a key role in customer satisfaction. By optimizing last mile delivery, companies can improve delivery times, reduce costs, and enhance the overall customer experience.

All facets of your logistics processes are important. When the inevitable problems come up, whether inbound or outbound, they can affect production, customer service, and ultimately profits.

Are you in or are you out? In terms of logistics processes, “in” would imply resources and materials coming in to your business to facilitate production. “Out” would be finished goods on their way to their final destination. The continuous movement of these flows are the processes that make up inbound and outbound logistics.

Virtually every business that handles physical goods relies on inbound and outbound logistics processes in order to operate from day to day.

Moreover, when these processes are optimized, other processes benefit in turn. On the inbound side, things like restocking and developing new products become easier to coordinate. And on the outbound side, fulfillment to customers runs smother with more shipments arriving on time.

Familiarizing yourself with the intricacies and dependencies of all inbound and outbound logistics processes gives you a clarity on how to better manage your resource flows and remove potential bottlenecks.

What is the Difference Between Inbound and Outbound Logistics?

Inbound logistics focuses on the movement of materials into a company, while outbound logistics involves the movement of finished products out of a company.

Perhaps one of the best ways to illustrate the difference between inbound and outbound logistics is to use an example we’re all too familiar with:

Have you ever had a notification of a delayed shipment?

If you need the shipment for processing your own goods, that’s inbound logistics. If the shipment is supposed to be on its way to fulfil a customer’s order, that’s outbound logistics.

One other point to consider is that the very nature of inbound vs outbound implies some form of median between the two. For all intents and purposes we can consider this point the receiving warehouse or centralized distribution centre.

Inbound vs Outbound Logistics Core Differences

What Is Inbound Logistics?

Inbound logistics involves how raw materials and goods flow into a company. This includes such steps as ordering, receiving, storage, transportation and management of incoming supplies. In other words, the inbound logistics process focuses on the supply portion of the supply and demand equation.

Specific Inbound Logistics Activities:

• Sourcing and Procurement
• Ordering and Purchasing
• Transportation
• Receiving
• Materials Handling
• Storage and Warehousing
• Inventory Management
• Expediting
• Distribution
• Tracking
• Reverse logistics

Depending on how a company handles incoming goods, industry type and buyer-seller relationship, the company may manage its own inbound logistics or outsource it.

How to Optimize Inbound Logistics

In a larger sense, optimization of any company process creates an opportunity for growth through redistribution of resources. With inbound logistics, this means faster, leaner, more agile and cost-efficient operations. It also means assessing every process, identifying strengths and weaknesses, and then making the necessary improvements.

1. Measure current performance.
   Examine potential inefficiencies concerning expenses, waste, quality degradation, redundant tasks, information gaps, and delays when optimizing inbound logistics. Consider hidden or intangible expenses like inventory carrying costs and the repercussions of subpar customer service, which can add complexity. Additionally, assess your operations against industry standards and competitors for comparison.
2. Analyze choices.
   Monitor the impact of your choices on both cost and efficiency within the scope of optimizing inbound logistics. Key cost influencers in inbound logistics include procurement, supplier oversight, transportation, reception, storage, material handling, and inventory control.
3. Develop strategies to counter inefficiencies.
   Recognize the need to balance trade-offs among various activities. Employing automation and analytics empowers a more data-centric approach to decision-making.
4. Build strong supplier relationships.
   Robust supplier partnerships can result in advantages like improved terms, shorter lead times, cost efficiencies, and enhanced stability amid market changes. Placing importance on communication enhances your suppliers’ comprehension of your operations. Establishing a supplier compliance strategy outlines your specifications and repercussions for errors, such as late deliveries or deviations from route guidelines. This approach can lower shipping and warehousing expenses, amplify efficiency and precision, and elevate customer satisfaction.
5. Use a Warehouse Management System (WMS)
   Warehouse Management System (WMS) software enhances warehouse efficiency by optimizing tasks such as receiving, storage placement, inventory control, and order picking.
6. Use a transportation Management System (TMS)
   A Transportation Management System (TMS) software automates, oversees, and enhances freight operations. It evaluates shipping quotes and service levels from various carriers, arranges shipments, and monitors their progress until delivery. These insights enable businesses to cut expenses, enhance efficiency, and achieve comprehensive transparency within their supply chain.
7. Combine deliveries:
   Shipments categorized as Less-than-Truckload (LTL) typically entail elevated shipping expenses and extended receiving durations. Challenges in consolidating these shipments may arise due to varying handling requirements, such as refrigeration for specific goods. In scenarios where achieving full truckloads is problematic, enlisting a third-party logistics provider (3PL) allows for merging partial loads from multiple customers.

What Is Outbound Logistics?

With outbound logistics, the emphasis shifts to the demand side of the supply-demand dynamic. This entails the storage and transportation of goods to the final customer or end user, encompassing stages such as order fulfillment, packaging, shipping, delivery, and associated customer service.

Specific Outbound Logistics Activities

• Warehouse and Storage Management
• Distribution Channels
• Inventory Management
• Transportation
• Delivery Optimization
• Last-mile Delivery

How to Optimize Outbound Logistics

Optimizing outbound logistics requires efforts designed to improve relationships and negotiations. Technologies can be used to figure out optimal delivery networks, plan routes, organize schedules and, ideally, reduce costs.

1. Understand faster delivery systems.
   n order to comply with swift shipping criteria set by carriers, it might be necessary to establish product staging within distribution centres. This could involve organizing shipments according to distribution centre directives and customizing packaging to align with their specifications. Certain sectors, such as wholesale food supply, might utilize a lumper service at distribution centres, engaging third-party personnel for trailer loading or unloading. The objective is to expedite operations, enabling quicker turnaround and driver rest periods. It’s crucial to ascertain whether lumping services will be employed by the distribution centre, as these additional costs need to be factored in.
2. Adopt current inventory strategies.
   The prevalence of Just-in-Time (JIT) inventory and other swift replenishment techniques has shifted away from the traditional practice of delivering substantial orders to customers with considerable time gaps. Given that JIT customers generally lack ample storage space for excess products, adjusting your outbound logistics to align with these inventory trends becomes essential. This adaptation might involve accommodating a higher volume of Less-than-Truckload (LTL) orders.
3. Build and improve partner relationships.
   Build strong partnerships with essential outbound logistics stakeholders – both customers and freight providers. If your industry involves sales to significant retailers with intricate supply chains, these partnerships could yield valuable insights. Establishing a rapport could prompt data sharing on your product’s performance, facilitating refinements in production, order fulfillment, and shipping. Close engagement with freight carriers can provide insight into strategies such as concentrating business with a select few shippers, potentially improving control over pricing and service level agreements.
4. Use smart route planning.
   Implementing automated route planning can minimize delivery waiting and travel times. These time savings have the potential to lower fuel expenses and enhance customer satisfaction.
5. Consider partnering with a 3PL provider.
   For many businesses, the details and expenses tied to outbound logistics render outsourcing to a third-party logistics provider (3PL) a strategic decision. The substantial scale of 3PLs affords them volume-based discounts and negotiation advantages, translating to potential cost efficiencies on your end. Leveraging the expertise and specialization of 3PLs also allows for agile scalability, aligning your operations with shifting business demands.

Inbound and Outbound Logistics Processes

The individual processes of inbound and outbound logistics can be broken down into multiple specific steps. In aggregate, they’re designed to enable the smooth movement of goods and products into and out of a business.

Benefits of Efficient Inbound and Outbound Logistics

Taking the time to identify and analyze key KPIs within your logistics systems is time well spent. As bottleneck and inefficiencies are identified, they can then be corrected to help improve operations, save resources and create a better overall flow of goods.

Benefits of Inbound Logistics

Along with lower costs for raw materials and more reliable supply sources, businesses can take advantage of the many benefits of efficient inbound logistics. The following are a few of the major benefits of efficient inbound logistics:

• Lower shipping and receiving costs
• Predictable raw material costs
• Improved product quality
• On-time deliveries
• Steady production rates
• More economical inventory management
• Ability to spot supply chain problems
• Stronger vendor relationships

Benefits of Outbound Logistics

With outbound logistics, the last link in the chain is the customer who must be kept happy. An efficient outbound logistics process not only helps retain customers, but also confirms that nothing is missing, broken or defective. Some of the benefits of more agile outbound logistics include:

• Faster and more on-time deliveries
• Less transit damage and loss
• Fewer order cancellations and returns
• Reduced delivery failures or mistakes
• Lower costs of operations
• Higher customer satisfaction rates
• Stronger brand recognition
• Better company reputation

Inbound and Outbound Logistics FAQs

Here are a few inbound and outbound logistics related frequently asked questions readers ask:

What is outbound logistics in simple terms?

Outbound logistics refers to the transportation, the storage and the delivery of goods to customers or other businesses. It relates to the sales of goods (out of the company) i.e. the outflow of goods from the production line to the end user.

Source: https://www.saloodo.com/logistics-dictionary/outbound-logistics/

What is the difference between inbound and outbound transportation costs?

Inbound logistics involves the efficient and cost-effective flow of materials and goods into a business, while outbound logistics involves the efficient and cost-effective flow of goods and services out of it.

Source: https://www.sellerapp.com/blog/inbound-outbound-logistics/

Is supply chain inbound logistics?

Inbound logistics is a supply chain operation tasked with ensuring that a company is supplied with the products or services it needs to do business. Directly related to supply-chain procurement, inbound logistics includes the processes of product acquisition, goods receipt, storage, and stock management.

Source: https://www.interlakemecalux.com/blog/inbound-logistics

What are some issues that may arise in outbound logistics?

Challenges of Outbound Logistics

• Managing the increasing complexity of customer orders.
• Determining the most efficient shipping routes.
• Meeting delivery deadlines.
• Complying with shipping regulations.
• Coordinating with operations, suppliers, and carriers.
• Handling returns and reverse logistics.

Source: https://www.skuvault.com/blog/outbound-and-inbound-logistics-what-they-are-and-how-to-optimize/

What is an example of inbound supply chain?

Let us suppose that you are a car manufacturer. Now, all the raw materials that are incoming to the plant for further processing are inbound activities. In this phase, transport for steel, rubber, plastics, glass and other things to the factory is still required.

Source: https://www.eurosender.com/blog/en/inbound-outbound-logistics/

How to calculate inbound logistics?

There are many metrics to measure the performance of inbound logistics, including error, defect and on-time delivery rates for shipments Some calculations to consider are:

• Freight cost for a pound of raw material
• Freight cost as a share of total production costs
• Time and expense to receive incoming shipments
• Number of times staff handle goods

Source: https://www.netsuite.com/portal/resource/articles/inventory-management/inbound-outbound-logistics.shtml

Do You Need an Experienced Logistics Partner?

If your company is involved in production and moves goods and materials, you have logistics needs. To create a more efficient logistics network, count on Brimich Logistics and Packaging to help streamline your outbound logistics operations today.

First Mile Delivery Optimization

Compared to last mile delivery, first mile delivery isn’t getting nearly as much attention or resource investment to improve efficiency and visibility. You would think the first step in the delivery of your products would carry weight, and it does.

Being the initial leg of the journey an item will make in an individual company’s supply chain process, optimizing first mile delivery helps ensure customers are not lost due to unmet expectations, low standards or inconsistencies.

Additionally, there are the obvious benefits that come with having a better understanding of your operations which through the process of analysis, uncover opportunities to improve.

What is first mile delivery?

As the official kick-off to the transportation of goods across the first leg of the supply chain, the first mile could also mean different things for different industries and supply chains.

For example, as a retailer this could be delivering items from a regional warehouse to local stores or a local distribution centre. For logistics services, this could be the picking up of goods, and either:

• bring them back to their own warehouses (i.e. next day/distribution model) before the next leg of shipping or
• provide a same day or on-demand service – where LSPs pick up the order from the shipper, which then go out for immediate delivery to the consignee

As another example, the first mile for a moving and storage company would involve the pickup from the customer’s home or store, then delivery of the inventory back to the warehouse or storage site.

Or it could be something as simple as an eCommerce merchant dropping off individually packaged and addressed products at the local post office for the next link in the delivery chain.

In both cases, it involves loading and unloading shipments. It can also involve different drivers managing the same items, and items with more than one order ID – such items are often resolved manually by many 3pls.

Optimizing First Mile Logistics

Automation is the key to optimizing first-mile logistics processes. By applying the right technology, excess expenses can be converted into funds that help propel growth.

By examining first-mile operations through the lens of lean performance, opportunities can be realized such as more efficient truck loading and more predictable delivery times at the last mile of the supply chain.

Smart manufacturers take advantage of any opportunity to assess logistics and find ways to improve the speed of getting products to consumers. A deeper understanding of inter-logistical operations can produce wins such as better price-points for their customers, and a more competitive edge in the market.

From a human input standpoint, auditing tasks of the company’s workforce can provide insight into how hands-on tasks may become automated ones. And instead of being interpreted as lost jobs, these operational savings can be used to boost employee satisfaction by being seen as promotions in assigning them new and more complex tasks.

First Mile Delivery Processes and Hurdles

From the time a product is packaged and ready to enter the supply chain process, it begins its journey through the first mile of delivery. Here are a few of the most important elements to consider:

Visibility

Once a service provider takes a truckload from its warehouse, there is zero visibility as to where the order is without some form of tracking technology. This is particularly problematic for shippers of big and bulky goods, fragile, or expensive items.

Today, it’s possible to update your first mile shipping and first mile delivery experience using many of the same techniques that are applied to last mile delivery.

Inexperience

In the larger sense, shippers are customers too, and expect a great experience from their service providers – so why not give them the same treatment when their business orders are shipped? 

With the boom in eCommerce, businesses have been paying close attention to the last mile in recent years. In order to stay competitive in the online landscape, businesses have rushed to overhaul and expand their last mile fulfillment services.

In comparison, nothing substantial has happened in the first mile world. From the perspective of the full delivery experience, the first mile has been largely ignored. This is more due to the fact that product origination could be thought of like the trunk of a tree; a singular point of origination, whereas the points of destination would be the branches or even individual leaves in the case of absolute end-users.

However, it’s important to realize every aspect of the delivery experience plays a part in creating customer stickiness.

Technology and Digitization

For many, first mile delivery processes such as coordinating pickup times and matching shipment size to truck availability can be improved by digitizing the first mile delivery flow.

Larger companies have technology for optimizing first mile logistics. Small companies on the other hand, may have to adopt transformational processes, moving their entire supply chain from manual to more efficient digital operations. Depending on a company’s size, this can take more time and resources than they have available.

Can You Outsource First-Mile Delivery?

The short answer is yes. Unless your company also has its own fleet of delivery vehicles, the first mile is typically handled by suppliers and facilities through external third party carriers.

How Long Does First-Mile Delivery Take?

The time it takes to accomplish the first mile delivery will depend on how far your supplier is to your warehouse or fulfillment centre. It will also depend on the shipping method used.

How Much Does First-Mile Delivery Cost?

First mile delivery costs will depend on the size and type of your inventory and the shipping method used to transport it. First mile delivery optimization involves using cost-effective methods of ordering only as much inventory as you need, or shipping in bulk based on forecasted demand. This reduces the amount of overall capital associated with moving the inventory.