According to 61% of the delivery industry, the final mile is the most inefficient aspect of their supply chain.
However, as consumer needs evolve and global supply chain enterprises grow, organizations must simplify their last-mile operations to meet expectations.
But what are the impediments creating these inefficiencies?
Regardless of how effectively you manage the primary supply chain difficulties, your purchase will be canceled if complications arise during last-mile delivery.
As a result, it is critical to ensure that the last leg of the supply chain trip runs smoothly and effectively. Identifying potential problems is a significant barrier in last-mile delivery. Only once you’ve identified the most prevalent issues can you take proactive steps to address them and devise solutions to avoid difficulties.
We researched and discovered several last-mile delivery issues that impede the operation of the last-mile process.
Why is last-mile delivery becoming more of a concern?
Individuals were obliged to stay home, resulting in a tremendous expansion in the already thriving e-commerce business when the epidemic first broke out. Along with this expansion, we experienced severe disruptions in global supply systems.
The general public became aware of the drama surrounding global shipping difficulties, and everyone kept track of how events such as the Ever Given incident and port congestion played out. End users rapidly observed unpredictable delivery times, shipping delays, and price hikes because of worldwide disruptions.
Businesses took the brunt of the price rises hoping the situation would pass quickly. Companies were seeking a means to solve the obstacles of last-mile delivery due to increased demand for economical delivery and ever-increasing competition.
Customer Expectations and Competition:
Although e-commerce enterprises have grown up left and right in an attempt to improve their online offerings, consumer expectations have risen, with customers seeking exceptional services that are both prompt and inexpensive.
Businesses develop ways to streamline last-mile delivery and fulfill orders faster to stay up. Regardless of industry, if you are supplying items companies to end consumers, you will encounter both large and small competitors.
Challenges in Last-Mile Delivery:
Costs are rising:
Although last-mile delivery is the shortest phase of the process, it is also the most expensive for the end user and the company shipping the materials. Integrating additional infrastructure to manage rising demand might also be pricey.
In addition, there may be unanticipated costs associated with delivery, such as delays or order cancellations.
Unfortunately, passing on these expenses to customers may be a terrible idea. Customers are more likely to abandon shopping carts if they encounter unexpected costs. As a result, your best alternative is to decrease and absorb these expenditures elsewhere.
Delays:
Late deliveries and the inability to fulfill delivery schedules can quickly add to enormous costs. Delays in worldwide shipment are typically easier to predict but more expensive to handle. When it comes to last-mile delivery, however, your best bet is to meticulously plan delivery routes and eliminate delays using a dispersed distribution network and real-time communication.
In adverse situations, late deliveries might result in orders being canceled. If you predict failing contracts, it’s generally advisable to cancel delivery orders on the fly. It can spare you the trouble of dealing with a cumbersome returns process. You will, however, have to cope with client expectations and late delivery fines.
Unexpected hazards:
We appear to have achieved a type of dilemma. How do you account for something unpredictable? Most significant initiatives have a built-in tolerance for things going wrong. Depending on the business, that figure typically ranges between 5% and 15%.
Experts in the sector who deal with local and long-distance transportation concerns frequently propose setting up a contingency fund. You should budget adequate time and money to cope with any unexpected problems. The actual price will depend on the number of issues you have faced previously.
Real-time visibility:
One of the most challenging aspects of last-mile delivery is a lack of visibility. Fortunately, it is also one of the easy problems to resolve. You may use visibility tools to communicate with drivers in real-time. Customers will also appreciate the option to follow their goods in real-time rather than depending on tracking codes that do not update frequently.
Inefficient routes:
Optimizing routes is one of the most effective strategies to reduce your operational expenses for last-mile deliveries. It offers the added benefit of enhancing delivery times and customer satisfaction. Of course, companies unfamiliar with shipping and logistics may struggle to account for the numerous variables that impact route design.
Outdated technology:
You’d be surprised at how many logistics firms still utilize antiquated technologies. Even when firms modernize, for some reason, last-mile delivery is sometimes disregarded. Typically, improvements are concentrated on warehouse optimization or worldwide transportation.
However, even simple changes to last-mile delivery can produce tremendous effects. There is no excuse when considering the shipping and transportation technologies and the technological alternatives at your disposal. Even providing your drivers with GPS devices and tracking software can assist you in real-time monitoring and delivery optimization.
Reverse logistics:
It’s astonishing how many businesses do not have reverse logistics processes. If you’re wondering what we’re talking about, reverse logistics is getting items back from customers to merchants or producers. Your organization will need to build a return shipping system for efficient product returns.
Remember that reverse logistics isn’t just for the customer’s advantage. If that’s all you’re interested in, you could distribute a new product to customers. Reverse logistics should assist your organization in recovering some value from returned items.
Conclusion:
As you can see, both small and large businesses have their job cut out if they want to stay competitive and satisfy their customers. Because consumer expectations and supply chain logistics are continuously changing, we propose to keep a close eye on the complications of last-mile delivery and optimize your logistics strategy.
