Last Mile Delivery Challenges And Solutions For ECommerce
In recent years, the landscape of eCommerce and retail has undergone a significant transformation, increasingly emphasizing an omnichannel strategy that seamlessly integrates multiple methods of shopping available to consumers, from brick-and-mortar stores to online purchasing. If you’re not yet familiar with the concept of last mile eCommerce delivery, you’ve likely missed a critical evolution in how businesses meet modern consumer expectations.
Last mile delivery, the final step of the logistics chain that delivers products to consumers’ doorsteps, has become a pivotal area of focus for businesses aiming to enhance customer satisfaction and streamline their operational efficiencies. This focus has arisen from the need to adapt to a retail environment where convenience and speed are top priorities for consumers.
As a response, many companies are increasingly turning to technology to gain a competitive edge. This digital shift involves the automation of logistic processes and the implementation of advanced last mile delivery solutions. These technologies not only aim to optimize delivery routes and reduce delivery times but also enhance the transparency and predictability of the customer delivery experience.
The market for last mile delivery software is rapidly expanding as more businesses recognize its benefits. It is projected that by 2028, the global market size for last mile delivery software will reach an impressive USD 11.96 billion. This growth is indicative of the crucial role these technologies play in modern eCommerce strategies, enabling businesses to meet rising customer demands for efficiency and reliability in order delivery.
Last mile delivery software offers businesses high-value features that include- route planning and optimization, digital/electronic proof of delivery, real-time tracking, customer and delivery team collaboration, and more.
Extended Read: Top 5 Last Mile Delivery Software To Choose From
What is the Role of Last Mile Delivery?
– The last mile delivery is the final stage of supply chain distribution that deals with getting the goods delivered to the customer from the warehouse/ store.
– Businesses have started to invest in advanced delivery solutions to meet customer demands.
– The last mile sector can benefit from flexible delivery dates, on-time delivery, real-time transparency, contactless deliveries, and cross-functional intelligence to improve delivery hurdles.
– Some even have started to use electric/ autonomous vehicles and drones to get the goods delivered at the earliest possible.
Interesting Stats on Last Mile eCommerce
– Close to 70% of millennial shoppers would want their eCommerce sites to offer 1-hour delivery options.
– About 30% of customers change their delivery date, time, and address once placing their order.
– More than 50% of customers would like to have a change date and address option on the eCommerce site.
– Close to 30% of customers in the US cancel their orders on not having a same-day delivery option.
– Over 90% of shoppers keep tracking their orders and want the deliveries to be completed as per the promised time.
What is the Last Mile Problem?
It refers to the difficulties associated with the final stage of delivery from a distribution center or facility to the end user’s location, typically in an urban area. This last segment of the delivery process is often the most challenging and expensive part of the supply chain, and it significantly impacts customer satisfaction. Several factors contribute to the complexity of last mile delivery:
High Costs: Last mile delivery is disproportionately expensive, often accounting for a substantial part of the total transportation cost. This is due to the smaller, less predictable nature of the shipments, frequent stops, and the need for smaller delivery vehicles.
Efficiency Challenges: Deliveries in urban environments often face delays due to traffic congestion, parking limitations, and regulations. Each additional stop and package involves time and resource consumption, which can decrease overall efficiency.
Increasing Consumer Expectations: Today’s consumers expect fast, reliable, and cheap (or free) delivery for their online purchases. Meeting these expectations can be logistically challenging and financially burdensome for businesses, especially with the growing demand for same-day or even two-hour delivery windows.
Environmental Impact: Last mile delivery, especially in dense urban areas, can have significant environmental impacts due to increased emissions from delivery vehicles. Businesses are under growing pressure to reduce their carbon footprints and find more sustainable delivery options.
Scalability Issues: As eCommerce continues to grow, scaling last mile logistics efficiently to handle higher volumes of deliveries can be problematic. Traditional delivery models may not cope effectively with peak times and special circumstances like holiday seasons or unexpected surges in demand.
How Does Last Mile eCommerce Deliver Work?
Businesses cater to customer needs by offering multiple delivery options, some of which include-
– 15-30 minute delivery
– Same day delivery
– Next day delivery
– Selection of a suitable delivery date
Businesses that can deliver as per customer requirements will help improve customer experience and brand identity. Those who have managed to handle the delivery pressure have ensured to grab a greater market share. Companies like UPS, FedEx, Amazon, and more are the leading players for smooth last-mile eCommerce delivery.
Key Delivery Challenges for Last Mile eCommerce:
Real-time Order Visibility: The top challenge faced by last mile eCommerce is real-time visibility on orders. Since there is no visibility on operations, the operations teams are in a spot when needing to find reasons behind delayed deliveries, fuel consumption, route diversions, etc., which is where supply chain visibility software can greatly help.
Driver Assignment for Delivery: Finding the right driver/ delivery associate to get orders delivered is crucial in last mile delivery. Assignments should be automated and made as per driver skill sets, service area, availability, etc.
3PL vs Own Fleet: When your business is in upward growth, one major headache for businesses is whether to use their own fleet or use an external fleet (3PL carriers). Some even use a hybrid model to assist with last mile order volume.
Enhancing Customer Experience: To stay ahead of the competition, having the best delivery customer experience for the last mile is the key. Since the need for faster and on-time delivery has become extremely crucial, businesses are seeking the best delivery software to handle their deliveries.
Reducing Delivery Cost: The last mile delivery accounts for about 53% of delivery cost. Hence, finding the best solution that can reduce fuel costs, routing times (to avoid delays) and more will be crucial to handle delivery costs.
Avoiding Package Damage: Having the package damaged when getting the order delivered is the biggest eCommerce delivery nightmare! Not only will this result in additional costs but also affect customer satisfaction.
Handling Returns: Many companies offer returns to improve customer satisfaction. However, order returns result in putting in additional revenue for pick-up and is a modern-day challenge for last mile eCommerce delivery.
Solutions to Combat Last Mile eCommerce Delivery Challenges:
To effectively address the multifaceted challenges of last-mile eCommerce delivery, businesses can implement a series of strategic solutions. Building on your suggestions, here’s how these solutions can be enhanced and expanded to tackle specific issues comprehensively:
Leverage Advanced Technology for Improved Logistics:
Real-time GPS Tracking and Communication: Implement GPS technology not just for locating the fleet but also to optimize routes in real time, reducing delays caused by traffic, construction, or other unforeseen events. Driver apps can facilitate instant communication between drivers and dispatchers, helping to address issues as they arise.
Autonomous and Electric Vehicles: Integrate autonomous delivery vehicles and electric vehicles to minimize labor costs and reduce the carbon footprint, respectively. These technologies also help in adhering to urban logistics restrictions, such as emissions limits and noise regulations.
Invest in Sophisticated Last Mile Delivery Software:
Cloud-Based SaaS Platforms: Utilize comprehensive cloud-based solutions that offer end-to-end delivery management, from automated driver assignments and route planning to real-time customer updates and integration with eCommerce marketplaces. These platforms should also support scalability, allowing businesses to handle peak loads efficiently.
Enhanced Visibility and Control: Ensure that the software provides detailed analytics and reporting tools to monitor key metrics like delivery times, customer satisfaction, and cost per delivery, enabling continuous improvement.
Boost Fleet and Driver Efficiency:
Automated Driver Assignment and Route Optimization: Use intelligent algorithms to assign deliveries based on driver location, traffic conditions, delivery windows, and load capacity. This reduces travel time and energy expenditure.
Integration with Carriers and Other Platforms: Seamlessly integrate with various carriers and platforms to enhance logistical flexibility and reduce dependency on any single provider. This also allows for cost comparisons and more informed decision-making regarding 3PL use versus own fleet.
Driver Support Tools: Equip drivers with mobile tools that facilitate proof of delivery, signature capture, and direct communication with customers. These tools can also help drivers manage tips and feedback, enhancing their engagement and satisfaction with the job.
Addressing Urban Logistics Challenges:
Use of Micro-Fulfillment Centers: Deploy strategically located micro-fulfillment centers in urban areas to facilitate quicker deliveries and reduce travel distances.
Dynamic Delivery Windows: Offer flexible delivery windows, especially in restricted areas, to comply with local regulations and manage customer expectations effectively.
Enhancing Customer Experience:
Real-Time Customer Notifications: Keep customers informed about the status of their deliveries through SMS, email, or mobile app notifications, including real-time location sharing.
Easy Returns Management: Implement a streamlined process for handling returns that minimizes inconvenience for customers and reduces associated costs for the business.
Best Software to Meet Last Mile Delivery Challenges For eCommerce Businesses
Solving the challenges of last-mile eCommerce delivery is crucial for businesses that want to keep their customers happy and cut down on costs. By using advanced technology like GPS and cloud-based software, companies can improve how they manage deliveries. This means quicker and more reliable service for customers. Efficient use of resources, like choosing between using their own delivery trucks or hiring another company, also helps keep costs down.
Finally, making sure customers have a good experience from start to finish, including easy returns, is key to a successful delivery service. All these efforts help companies stay competitive and keep their customers coming back. LogiNext is your one-stop solution to meet requirements for your logistics and supply chain needs. With a presence in over 50 countries and 200+ enterprise clients, you can be assured to find the best last mile delivery software to meet your last mile eCommerce use case. Contact our expert by clicking the red button below for more information.
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