Mar 19 2019
The Last Mile: Waiting Is Not The Hardest Part
As e commerce continues to dominate the retail landscape, consumer demand for fast delivery of items has become not a luxury but a requirement. In the US alone customers spent $517 billion in online retail in 2018. Thanks to online giant Amazon, and similar sites customers expect a fast, easy and most importantly, timely delivery. Last Mile Delivery is categorized as the movement of goods to their final destination, and as is often the case the final stop in the journey is usually a personal residence. Don’t let the name fool you though, the last mile can either be a few blocks, or a few hundred miles. Retailers and shippers must work in synchronization to allow a seamless operation. An emphasis on last mile is critical to remain competitive within the market because consumers have near endless options to purchase products.
The Biggest Roadblock
Logistics in and of itself is a challenge. It’s detailed and requires coordination amongst many different people and suppliers. The last mile is no exception. The biggest challenge is inefficiency. You’ll be surprised to know that 50% of the cost associated with moving goods comes from the last mile. This is in addition to warehousing, fulfillment and technology expenses. How can this leg of the journey contribute to such a significant portion of the overall cost? One reason is urban logistics. Since many retailers, customers and other merchants are located in central business districts congestion is a problem, and the end result is time spent not delivering, leading to a backlog of undelivered goods. One way to combat this is having regional fulfillment facilities that enable a more expedited operation in conjunction with a local delivery network. The closer these centers are to larger metropolitan areas, the easier the the process becomes.
Adapt or lose
Partially of its own doing, partially as a way to meet consumer demand many deliveries offer something called “flexible delivery”. As the name implies, customers have some control over their deliveries. Whether it’s not having to wait for a delivery of a larger item to sign if it requires a signature, or having it dropped off at a specific location at their delivery address. Logistics providers and the retailers they serve are trying to keep up with consumer demand as best they can. Innovation will be the key going forward. Retailers and logistics planners are exploring additional methods of delivery as 1 and 2 day deliveries become more common in the marketplace. It can be argued that the future of any last mile operation will hinge on the ability to adapt to emerging demands and emerging technologies. If a provider doesn’t keep changing with the industry, their competitors will.
It’s no secret the world has shifted away towards traditional brick and mortar stores. E commerce dominates the retail landscape and as such, so does last mile logistics. Whichever company is able to provide the most seamless and flexible delivery service of consumer products, while skillfully handling the logistics challenges associated with it, will ultimately succeed long term.