Summary
The progression of last-mile delivery’s importance tells a comprehensive story about the many aspects of courier industry trends that have led to the staggering increase in attention and importance. Statista (2022) states that the global last-mile delivery market is expected to grow by $200 billion U.S. dollars by 2027.
Last or final-mile logistics is seen as the most challenging part of the fulfillment process and the most expensive. The process is time-consuming and costly, taking up 60% of the total logistics cost. This is easily one of the most critical services to master to provide streamlined operations and lower costs to increase customer satisfaction and contribute to environmental sustainability.
This white paper will examine some of the most frequent issues for couriers today and discuss how to improve your last-mile logistics operations and increase customer satisfaction without breaking the bank.
Primary Challenges of Last-mile Delivery
Efficient Route Planning
This is easily one of the most critical aspects of successful delivery service - and the least predictable.
Despite the simple phrasing, route planning can make or break the success of your delivery operation. Not organizing routes properly can lead to many issues - staffing, assets (vehicles, specialized equipment), late or failed deliveries, among other business challenges. One study showed the top three customer complaints were all related to timeliness - consumers wanted better security during the delivery process, lower delivery costs, and faster delivery speed.
Security is increasingly important for businesses. As industries adopt cloud-based software, security concerns increase for consumers. They entrust you with sensitive, personal data that could be used maliciously. While package losses are expected in shipping, customers rely on you to deliver their items safely and intact. It's important to communicate that you take this responsibility seriously and do everything possible to prevent it.
Another frequent hiccup concerns the natural, uncontrollable setbacks to making prompt deliveries - fleet team members getting lost, a sudden car accident causing traffic congestion, or substantial weather events. Large urban areas constantly undertake construction projects and adjust street and lane closures without advance notice. ETA’s reported to consumers can depend on the customer’s location relative to the distribution warehouse, the number of deliveries on that fleet member's route, and traffic conditions while on the route.
Supply Chain Logistics
The pandemic saw a change in all fulfillment areas, and the supply chain took a hard hit when eCommerce shot up to unexpected demand levels. So far, 2023 has seen supply chain numbers return to pre-pandemic levels, but predicting the future of this sector is nearly impossible.
The initial supply chain shock in 2021 was a wake-up call for many businesses and inspired immediate action for most companies. In the last year, supply chain investments increased across the industry.
The New Normal reported supply chain predictability stabilized at 65%, a 7% drop from pre-pandemic trends. The market adjusts sales offerings based on consumer purchase patterns, causing Supply Chain Management to be vital to the success of your last-mile logistics.
Despite the positive increase in overall satisfaction, 87% of surveyed businesses reported some level of supply chain disruption within the last year; 62% of the respondents contended that their supply chain was reliable enough to take on future challenges.
Sustainability
Like most industries, the courier service industry has felt pressure to increase sustainability. It is one way for supply chain leaders to increase their efforts to use and deliver more sustainable products.
Things are headed in the right direction - courier service stakeholders have dedicated significant resources toward technology that improves efficiency, reduces waste, and meets customer expectations for genuine eco-friendly efforts.
In a reasonably large contradiction in trends, Blue Yonder’s 2023 Customer Sustainability Survey concluded that 78% of consumers would wait up to a week for delayed deliveries if the shipment were environmentally conscious. While this isn’t exactly a new request of consumers, 84% of surveyed consumers plan to amplify or maintain their current initiatives, and 43% plan to seek more sustainable upstream options.
Speed and Agility to Market
The current courier service industry community has many challenges regarding keeping up with larger distributors. Consumers (typically) want their deliveries quick and cheap; both factors can make or break the success of a courier pick-up. 59% of consumers say they buy more frequently from retailers that offer fast, easy, and transparent delivery.
During the pandemic, companies from all industries slashed prices and initiated entirely new services to keep customers. The greater reliance on speedy delivery services and a supply chain that’s only recently recovered from a three-year pandemic pummeling required more work and money to service customers at the same price and speed.
As businesses and warehouses expected employees to come into the physical office and resume operations as “normal,” their expenses were redistributed across the company.
This gap in time is an opportunity for other, smaller companies to fill the gap. This could be a risky move - if consumers move on and use other companies, they could decide to stick with the independent provider over returning to the hassle of navigating such large franchises’ rules and limitations.
Moving Forward
Finding technological and supply chain solutions to coordinate all logistical pitfalls is daunting to any courier delivery provider.
To cut operating costs, the industry giants are initiating an outsourced network strategy utilizing independent distributors. The large number of locations and warehouses makes it impossible to implement changes simultaneously when each station requires its unique strategy.
FedEx CFO Mike Lenz said, “We will spend some cap ex there to get the facilities cross-utilized, ” within the overall plan of reducing annual expenditures by up to 1.5%. “We have to be thoughtful about sequencing it and be thoughtful that it’s a network, and we just can’t singularly make one piece of it work while the rest of it operates another way,” he said.
While large providers take time to figure that out, other companies continue to provide the service customers have become accustomed to over the last few years. This is only one example of where industry giants essentially do whatever they need to do - making customers question how long they can rely on them for regular distribution before they cut other programs.
Whether you specialize in B2B or B2C, consistency and reliability are the most essential services that affect customer experience and loyalty.
Innovative, Ever-Changing Technology
Route planning tools are essential to addressing customer needs and their desire for complete transparency. A considerable benefit is for leadership and stakeholders - this technology reports how efficient the route is, the truck’s current capacity, and how much fuel is being used. Implementing new tech strategies like this will save time and money in the long run.
Last-mile delivery technology has GPS tracking capabilities that not only designate the best routes to accommodate drivers’ deliveries but can update customers in real time if there are delays due to weather or traffic. Transparency provides customers with information they didn’t have access to before and the power to track team members' locations to provide timely status updates, communicate with them, and update delivery ETAs if they need to pivot suddenly.
Managers can see where their executives and fleet are and suggest more efficient paths for speedy delivery. This method has proven successful, with 54% of users reporting 42% fewer disruptions, 39% reporting revenue growth, and increased efficiency of fleet time on the road.
Artificial Intelligence and Machine Learning
As businesses worldwide seek to turn supply chain management into a science, many have invested in advanced technology like artificial intelligence (AI) and machine learning (ML).
Of the companies surveyed, 78% are leveraging AI/ML in their supply chains, including inventory and network optimization (33%), warehouse resource management (29%), supply chain risk management (26%), and demand forecasting (25%).
“Instead of speed, retailers should consider improving the reliability of orders through AI and machine learning technology that will help them route orders accurately and efficiently and ensure carrier allocation and capacity levels match demand,” noted Stephane Gagne, Product VP with Fareye.
Customer Experience
Retail relies primarily on one thing - its audience. Customer research and targeting have become the bread and butter of marketing and can measure the success of any campaign.
Customer-focused strategies are crucial to enhancing consumers’ delivery experience. Last-mile logistics influence customer retention and loyalty as the primary path customers interact with their orders.
Unlike other couriers, DeliveryCircle uses local businesses to complete fulfillment in different areas of the nation. This is the sole reason a customer chooses you for their delivery needs - it shows you are contributing to that community individually and investing in the success of small businesses.
Why is last-mile delivery so important?
Last-mile tracking has produced multiple advantages for companies: increased efficiency, greater brand recognition, better customer service, lower operating costs, and better strategic planning with the reporting features incorporated into the system.
According to Louis DeJianne, UPS Director of Marketing, when it comes to final consumer deliveries, the final-mile experience is what consumers walk away with at the end of the day.
For those companies waiting to upgrade their software - these issues will only grow in importance. Today’s retail market has grown approximately 9% in the last year. ECommerce retail sales will increase by 35% within the next seven years. There is a lot of opportunity wrapped inside such an incredible increase, but if you aren’t keeping up with everyone else, you will lose business to competitors.
The biggest mistake a courier company can make is to refrain from doing anything at all. Keeping inadequate, outdated technology hurts you, your team, and your business. Those hesitant to implement the latest technology will fall behind their competitors quickly.
Decios - The All-in-One Fulfillment SaaS
While 72% of retailers believe a one-platform technology solution offering more control and less cost is highly beneficial, only 27% of retailers use a last-mile delivery platform.
Decios, our mobile technology with real-time tracking, route optimization, geo-fencing, signature and photo capture, barcode scanning, white-label text messaging, and more all from the convenience of your pocket.
We created this service to be entirely enterprise-ready. You can incorporate day-to-day logistics for individual locations, groups, or national programs and view central management reporting based on your programs and rules. We built Decios to control costs, simplify fulfillment operations, and standardize delivery practices. Let us help you streamline your last-mile logistics and create the ultimate delivery experience for your customers!
A few of Decios features:
- Driver options to fit your unique needs and step-by-step instructions for the workforce to complete tasks
- Signature & photo capture proof of delivery.
- Automatic text notifications
- Efficient capacity using drivers dedicated to you
Summary
Challenges in retail and distribution, like inventory shortages, mistakes in order tracking, and routing errors, can be explained by process inefficiencies, inflexible technology, and a lack of transparency. Understanding how important last-mile logistics and innovative solutions are can reduce costs, streamline operations, increase customer satisfaction, and preserve the environment.
Last-mile tracking has produced multiple advantages for companies: increased efficiency, greater brand recognition, better customer service, lower operating costs, and better strategic planning with the reporting features incorporated into the system. Customer-centric methods can unlock the full potential of your business’s final-mile operations and logistics competitiveness.
If you haven’t already, it’s time to recognize the significance of last-mile logistics for your business. With the right strategy, companies can transform their delivery networks, achieve competitive advantages, and contribute to a greener and more sustainable future.
How DeliveryCircle Can Help
DeliveryCircle’s goal has always been to help your business establish visibility, expediency, consistency, and flexibility.
As a logistics solutions provider, we support your local delivery operations, handle day-to-day deliveries, manage carriers and drivers, and find capacity for all your delivery needs. After a deep dive into your business needs, we can develop a system of tools and operation solutions that positively impact your business.
We prioritize being flexible and available to guide our clients through the whole process, start to finish, to ensure a seamless launch and ongoing logistics experience for your customers. Your business is displayed to consumers from procurement through final delivery, and the impression left for customers can make or break your reputation.
Give us a call, and we will work individually with you to curate a free estimate for strategies DeliveryCircle could implement to increase your productivity and quality of service.
The benefits of working with DeliveryCircle are long-lasting and conveniently listed here.
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