What is Last Mile Delivery? Challenges and Solutions

TL;DR

• Last mile delivery is the final step from the distribution center to the recipient’s door.
• Challenges include on-time delivery, route planning, real-time tracking, and meeting consumer demands.
• Last mile delivery costs can account for up to 53% of overall shipping expenses, influenced by various factors.
• Solutions include better logistics planning, technology investment, realistic KPIs, and expanding logistics networks.

Last or final mile delivery refers to the journey of a shipment from the final distribution centre to the doorstep of the recipient. E-commerce businesses face ever increasing demand for faster or even same-day delivery solutions but there are last mile problems and challenges that can slow everything down. Find out more about why efficient last mile delivery is important and how Eurosender can provide solutions that reduce last mile delivery costs for your business.

Final mile delivery is the very last link in a long chain of logistics events. Even if ordering and collection go smoothly, an inefficient logistics process during transit can negatively impact on last mile delivery costs and, in extreme cases, cause your business to lose valuable customers.

Before going for the solution, you first need to understand the so-called last mile delivery problem as well as the challenges.

Read more about:

• Last-mile delivery and challenges
• First-mile delivery
• Difference between first, middle and last-mile delivery

What is the last mile delivery problem?

The problem with last mile delivery is that it is the most complex, time-consuming and expensive step in the shipping process. Yet it is the most critical.

There has been a continuous rise in e-commerce activity which has substantially increased the volume of goods to be transported. At the same time, customer expectations have evolved to include fast, if not free, delivery.

This, in a nutshell, is the last mile delivery problem.

You may also be interested in:

• Shipping with UPS
• Shipping with FedEx
• Shipping with DHL

Next, let’s look at the challenges that lie ahead for businesses looking to optimise last mile delivery processes.

What are the biggest challenges with last mile delivery?

Most logistics companies would agree that final mile delivery is the most inefficient part of the supply chain.

Below are typical last mile delivery challenges that online businesses face:

• On-time deliveries. Last mile delivery couriers often face difficulties in planning due to the dynamic nature of logistics and countless unforeseen circumstances that can arise on any given day. The final leg of transport typically involves many stops for other collections and deliveries along the way. This may increase the expected delivery time.
• Route planning. This may seem obvious but it can be very difficult to plan driver delivery routes efficiently because of countless variables that have to be taken into consideration. Yet, ineffective route planning can lead to operational delays that trigger a domino effect and may impact many final mile deliveries.
• Real-time tracking. Outdated technology can also pose problems in last mile delivery. Even if the tracking indicates “Out for delivery”, the last mile courier may arrive anytime during the day so this lack of visibility can lead to a frustrating customer experience. Customers expect real-time follow-up and full transparency during the whole shipping process.
• Consumer demands. Consumers increasingly expect same-day courier solutions with even less margin of error. Orders need to be delivered to the right place, to the right person, at the right time. Even if your final mile delivery destination is in the same city or region, you need a reliable carrier partner to help keep last mile delivery costs to a minimum while also guaranteeing customer satisfaction.

Read more about:

• Estimated delivery time
• How to track a shipment
• Same-day courier services

What are the costs for last mile delivery?

Fuel costs, labour expenses, logistics management software and failed deliveries are the main contributors to last mile delivery costs. These factors and other countless variables in the logistics process mean that last mile delivery costs can reach 53% of overall shipping costs for e-commerce businesses and retailers. On a worldwide scale, final mile operations can exceed 40% of the whole supply chain cost. Poor final mile delivery planning can drive costs up even further.

The availability of free shipping means that consumers are less willing than before to pay. This leaves the online retailer to cover the last mile delivery costs.

E-commerce businesses need to invest heavily to optimise last mile delivery costs because they simply cannot afford to lose their customers to competitors. Customer satisfaction should always be a top priority because it guarantees loyalty and future business.

Check our range of courier services for e-commerce businesses and start optimising your last mile delivery costs with us.

Optimised solutions for your e-commerce:

• International courier services
• Set up your e-commerce logistics
• International e-commerce shipping
• E-commerce shipping methods

How to improve the last mile delivery

Improving last mile delivery essentially boils down to better logistics planning and smart investment strategies with a long-term vision. Your aim should be to get the shortest and most cost-effective route for your final mile delivery services.

Check our guidelines below to decrease last mile delivery costs and optimise the experience of your customers.

1. Plan the entire delivery, especially the routes to be used and also consider potential last mile delivery challenges. Keep a good flow of communication with your customers to improve their experience and mitigate their frustration if things go wrong.

2. Set realistic KPIs and customer expectations. Although the transit time may be longer than you would like, your customer is more likely to trust in your service and keep doing business with you.

3. Invest in technology such as automated dispatch software and management systems to optimise route planning and shipment tracking. Automated processes save time and improve the workflow in general. Use GPS to track the live location of drivers and shipments in real time. Automatic customer notifications would be a huge plus.

4. Arrange back-up solutions to ensure you can always meet the demands of your customers. Expand your network of logistics partners and warehouse storage options. This way your business has a wider reach and also reduces last mile delivery costs for each order.

What final mile delivery solutions can Eurosender offer you?

Eurosender can help your business optimise your last mile delivery. For each last mile delivery challenge presented, we offer the solution:

• Low cost: we work with reliable couriers and offer some of the most competitive prices on the market. Create a business account to get even more exclusive discounts.

• Transparency: you get online tracking details as part of the shipping service. Our logistics experts are in constant contact with carriers, to provide you with additional assistance or updates at any stage.

• Tailored solutions: you can request a fully-customised shipping service to match your exact requirements. This option is available for both private and business customers.

To sum up, why is last mile delivery important in logistics?

• It increases customer trust and loyalty.

• It ensures a competitive advantage in the market.

• Efficient final mile delivery improves user experience.

• Optimises costs and investments in the sector in a more customer-focused way.

• It enhances the your company brand, developing a perception of professionalism, security and authority.

Would you like to speak to a logistics expert about final mile delivery solutions? Get in touch and receive dedicated support and competitive prices.

Want to know more?

Check our articles that explore different topics within the logistics industry.

This article was written in collaboration with Marcela Neves.