As the term suggests, ‘last mile delivery’ is the last link in the supply chain that a package goes through before it is delivered to its end customer.
Since it often accounts for almost 50% of the cost of a supply chain and is also the most complex and challenging part, a logistics and delivery company needs to understand the many challenges of last-mile delivery operations.
With the fully automated Last Mile Delivery Management Software not only helps to understand these challenges and factors but digitizes (and brings them online) the entire process so that fleet managers can maintain holistic control over it.
What are the biggest challenges in last-mile delivery?
1) Changing customer requirements: The delivery requirements of modern clients have undergone a full transformation. The days of "4-6 business days for delivery" or "your order is out for delivery" are over! It's all about "24-hour delivery" and "same-day delivery" these days, thanks to e-commerce behemoths like Amazon. Not only that, but consumers also want to be kept up to date in real-time on the status of their packages (e.g. via in-app notifications or SMS alerts). Additionally, Logistics & Distribution companies must account for shifting client schedules and delivery windows, as well as customization.
2 ) Delivery costs the last mile: As previously stated, the rising needs of quickly changing client expectations place enormous strain on supply-chain networks. Even if buyers are ready to pay the extra fees for such fast shipping choices, maintaining such an exacting delivery network remains a tremendous logistical challenge.
Last-Mile Delivery charges can account for up to 40% of a company's total delivery cost. While this is passed on to the end consumer, the execution difficulty remains, particularly given the number of dynamic variables that are continually altering supply-chain networks and, in particular, last-mile logistics. Furthermore, in circumstances where the expenses cannot be passed to the end customer, such as failed or late deliveries, rejected deliveries (and so on), the costs must be borne by the transport company.
3. Real-Time Visibility: In years past, service managers had limited control or “visibility” of the delivery process once packages or vehicles were ready for delivery. They relied on drivers calling from pit stops or keeping daily activity logs. This resulted in inefficiencies such as communication gaps, the ability to resolve issues/emergencies on the fly, maintaining a high level of route optimization, and harmful practices (etc.).
And with increasing competition and today’s complex global chains, such inefficiencies could easily become major problems.
In addition, today’s customers also want to be informed about the movement of their packages throughout the delivery process. process, especially the last mile. Where is your driver, how long will it take, the final ETA — they want to know everything!
While the introduction of this feature can be credited to companies like
Uber, customers of all stripes now expect this very accurate service for all your deliveries! No pressure!
This type of “real-time demand” puts tremendous pressure on the supply chain network, and while it’s one thing when everything goes according to plan, it creates new stress and problems when it does the case is the actual schedules differ from the forecast ones.
4) Route Optimization: Several reasons continually put pressure on Logistics & Distribution organizations to manage their daily deliveries. In such a case, the only option is to employ advanced (automatic) Route Optimization algorithms.
The process of determining the most effective route between two delivery destinations is referred to as route optimization. Remember that the most efficient route is the one that balances all such factors to arrive at the most cost effective and efficient way, not the one that is the shortest, cheapest, or fastest.
Because all of the problems (and inefficiencies) of a supply-chain network build up and influence last-mile delivery logistics, employing a solution like Route Optimization Software is critical in controlling them. Without this, Fleet Managers would be unable to satisfy the complicated requirements of a delivery network in modern times.
5) Changing Variables: The unpredictability of the factors on which a supply-chain network is based is perhaps the most difficult part of it.
Weather and traffic patterns are always changing.
Performance and availability of drivers
Vehicle accessibility
The availability of resources (on-site teams, warehouse teams)
Infrastructure (warehouse, road repair/building)
All of the above variables are continually changing (e.g., a sudden storm, or an accident), impacting the (lack of) predictability of last-mile delivery logistics. This has an impact on timetables, pricing, and delivery dates.
As a result, Fleet Managers must maintain real-time contact not just with their internal teams but also with their customers. Using GPS-enabled last-mile delivery software that automates the entire delivery process in real time is another important tool.
6) Use of modern technology: With increased competition and increasingly demanding customers, current technologies such as an automated, cloud-based Last-Mile Delivery system are necessary. This software balances all of the factors and assists Logistics and Distribution companies in staying on top of their delivery operations.
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