Last Mile Delivery Challenges and How to Manage Them

In the last few years, the e-commerce industry has seen a massive rise in value and demand. The industry is expected to grow to $5.54 trillion this year, with the number touching $7.4 trillion by 2025.

Last mile delivery challenge

With such a push in this sector, a phenomenon known as the Last Mile Delivery has cropped up. Internet and modern technology has helped e-commerce businesses to run efficiently, but at the same time, it has changed customer expectations too.

The Last Mile Challenge

With e-commerce and delivery services cooperating, customers have been able to track their packages from the packaging stage to the delivery at their doorstep.

This tracking ability has changed how customers want updated information on their purchases. In the past, the final step delivery, the “last mile” did not exist as all the information they had was that their delivery would take a broad range of time (e.g. 5 to 6 working days) to be delivered.

With online tracking, customers are given updated information, broken down in different steps such as order being packaged, handed to courier, out from the centre and reaching the intended customer’s city.

However, the challenge of meeting customer expectations from this point onwards, where tracking can simply say the package is “out for delivery” is the hardest. Customers have no idea with this information that where exactly is their package in the last point and with the current customer mind-set and expectations; this can be extremely frustrating for them.

Amazon delivery boxes

Why does the Last Mile Challenge Exist?

For delivery services, getting the package on the doorstep on in the hands of the customer is what builds their reputation and brings in more business.

Most services stress on having a large force in their main warehouses to sort the packages, fast delivery transports such as planes, large vehicle fleet etc. However, their efforts are mostly concentrated towards building the back end of the supply chain. The last mile is oft ignored or poorly managed.

Let’s look at the top 5 reasons why this happens:

1. End to End Transparency

While tracking IDs and consignment numbers have helped customers track their packages, there is always ambiguity of where exactly it is. Simply giving them information that the package is at a specific point is not satisfactory for them.

This is the most important thing in any last mile delivery. Simply having the words “out for delivery” or “in route” is not enough.

2. Sorting Delays

While one can argue that this step is much before the last mile delivery, delays in sorting can have a significant impact on it since there is always one sorting right before the last mile delivery.

Having warehouses and a larger manpower or robotic sorting makes sense when there are large collection centres. Even then, most of the time packages are sent end-point centres such as city or area specific and the deliveries are then again resorted for specific courier persons or vans, wasting time.

3. Route Planning

Most services plan their delivery route with costs in mind and that means that a package that can be delivered early can witness a significant delay.

While using this method will look good on the balance sheet and profits, a significant intangible value is lost through unsatisfied customers. This is something that cannot be translated into trackable losses easily, but is bad for business.

4. Failed Deliveries

Deliveries can go undeliverable for many reasons. Lost packages, incomplete addresses, recipient not available etc.

Whatever the reason, the customer can get extremely frustrated; especially considering that package they are expecting to arrive on time could be expensive, a time sensitive equipment or even of a high sentimental value, adding in to their dissatisfaction.

5. The Unpredictables

There are some things that are not in the control of the delivery services. Though not the fault of the service, the customer’s frustration and dissatisfaction does stem from it.

Things like extreme weather, traffic jams, even the delivery vehicle getting a flat, is beyond the control of the service provider.

Product shipping

Managing Last Mile for Customers

Creating the perfect last mile experience for customers is a challenge that can be difficult to achieve. On the other hand, if your delivery service takes care to manage a few critical issues, it can help improve it:

Don’t Keep Customer in the Dark

Make sure that your customer is aware that the package is more than just out for delivery. Information like expected time of delivery, and even where the package is in terms of a localized area or the vehicle location can go a long way in satisfying customers.

Technology is Your Friend

Invest in process improvement technologies. AI based solutions for package sorting, transportation selection and other areas can drastically reduce not only costs running the business, but streamlining deliveries, especially in the last mile.

Strategic Warehouse Locations

The last point of warehouse should be as close to the customers as possible. Analyse if you are using a single or just a few end stop warehouses to cover too much of an area. It could also be having too much volume or densely populated areas that could be slowing you down. Open up more warehouses in this case.

GPS Tracking Vehicles

Live tracking of delivery vehicles will give you insight into any delays that you cannot spot otherwise. Are your vehicles spending too much time on the road and not delivering fast enough? Perhaps it is just the drivers that need a bit of a positive reinforcement.

Route Optimization

Find the best route for your vehicles can be tough, but if you pair with your vehicle tracking system, you will have a wealth of data that you can use. Route optimization through analyzing traffic conditions, average delivery time, vehicle capacity and other factors can help understand how to plan deliveries with minimum time.

Package delivery man

Last Mile: Your Success

Remember, if you can implement strategies that can help you overcome your last mile challenges, this will have a lasting positive impact on your delivery business.

This stands not only from the customer satisfaction perspective, but also that these will help you reduce hidden inefficiencies in your work and increase profitability.


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