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 demands of modern customers and their need to en Strega have a complete metamorphosis been through.
The old “4–6 business day delivery” or “your order is ready to ship” method is a thing of the past. Led by e-commerce giants like Amazon, it’s all about ‘24-hour delivery’ and ‘same-day delivery’ today. Additionally, customers now want real-time updates on the progress of their package (e.g. through in-app notifications or SMS alerts).
In addition, logistics and distribution companies also need to consider changes in customer schedules and delivery times, as well as customizations.
All of this puts tremendous pressure on supply chain networks and especially beyond the last mile. Delivery logistics, as that is where the full collective impact of such demands and challenges ultimately accumulates. Therefore, transport and logistics companies have to rethink and redesign their logistics on the last mile so that they can successfully meet the challenges of constantly increasing customer requirements.
2 ) Delivery costs the last mile: As mentioned above, rapidly changing and increasing customer demands put enormous pressure on supply chain networks. And while customers are willing to pay the additional fees for such expedited shipping options, maintaining such a demanding delivery network is still a daunting logistical task.
Last-mile delivery costs typically account for 40–50% of a company’s total delivery costs. And when that moves to the end customer, the execution challenge remains, especially given the number of dynamic variables constantly impacting supply chain networks and last-mile logistics in particular. In addition, in cases where costs cannot be passed on to the end customer, e.g. failed or late deliveries, refused deliveries (etc.), the costs must be borne by the transport company itself.
Here, the use of modern technology such as fleet management software optimizes a delivery operation to achieve efficiency through correct planning and use of resources.
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 bad 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: As mentioned earlier, several factors are constantly pushing logistics and distribution carried out by companies in the management of their daily deliveries. In such a scenario, using sophisticated (automated) route optimization techniques is the only solution.
Route optimization refers to the process by which the most efficient route between two delivery points is achieved. Remember that the most efficient route isn’t the shortest, cheapest, or fastest, it’s the one that balances all of these variables to arrive at the least expensive and most efficient route.
As all the challenges (and inefficiencies) of a supply chain network add up and affect last-mile delivery logistics, using a tool like a route optimization software is key to managing it. Without this, it would be impossible for fleet managers to meet the complex demands of a modern delivery network.
5) Changing Variables: Perhaps the most challenging aspect of a supply chain network is the unpredictability of the variables it focuses on.
- Always- itself changing weather and traffic patterns
- Driver availability and performance
- Vehicle availability
- Availability of resources (equipment on site, storage)
- Infrastructure ( warehouse, road repair/construction)
All of the above variables are subject to constant change (e.g. a sudden
storm, an accident) and therefore constantly affect the ( lack of ) Predictability of last-mile delivery logistics. This affects conditions, costs, and delivery times.
Therefore, it is paramount that fleet managers communicate not only with their internal teams but also with their customers in real-time. Again, using GPS-enabled last-mile delivery software that automates the entire delivery process in real time is a key tool.
6) Use of modern technology: With ever-increasing competition and with consumers becoming more demanding, the use of modern technology like an automated, cloud-based Last-Mile Delivery system is unavoidable. This software balances all the numerous variables and helps Logistics and Distribution firms to stay on top of their delivery operations.
For Logistics and Distribution firms, understanding the challenges of Last-Mile Delivery is critical for managing an entire supply-chain process efficiently. Here is where the use of last-mile delivery software is critical-for-success. Without it, it would become impossible for Fleet Managers to monitor and execute the complex processes that constitute a modern and complex delivery operation.
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