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The Challenge with the Last Mile of Delivery

June 3, 2019

Massive challenge meets enormous opportunity: this is the last mile of delivery.

From driver shortages to the emerging demands of the e-commerce economy, the challenges facing the modern supply chain are considerable. One of these challenges is the last mile of delivery, which has proven consistently difficult — and consistently expensive — often exceeding 50% or more of the shipping costs.

As its role gains greater consequence, businesses are finding that the quickest way to box out the competition is by developing innovative strategies for the last mile. Solving for the last mile means understanding what the problems are; by pinpointing costly bottlenecks with a high degree of precision, transportation companies and retailers can design targeted solutions capable of delivering tremendous ROI.

Doing so doesn’t mean reinventing the wheel, however. Instead, data integration platforms capable of streamlining supply chain communications — communications that are still largely reliant on voice and email — leverage technologies that are already deployed at key points of shippers’ operations. These tools synthesize existing information from multiple assets into actionable insights, allowing shippers and their customers to maximize the benefits of a thriving last mile delivery operation with fewer disruptions.

To support these roles and deliver on customer expectations, shippers typically rely on a wide range of tools such as Warehouse Management Systems (WMS), Order Management Systems (OMS), and Transportation Management Software (TMS) to consolidate operations and keep everyone — customers included — on the same page. While these systems aren’t all created equal, they ideally provide the insights needed to not just anticipate and identify problems but communicate and resolve them before they cause widespread disruption.

 

Innovative strategies for the last mile

 

What Problems Occur in the Last Mile?

As industry veterans well know, a lot can go wrong in the last mile, and it can be especially difficult to pinpoint issues and resolve them before they cause critical disruptions to customers’ day-to-day business. While these problems are familiar to anyone operating in the transportation sector — routing errors, inventory shortages, and related miscommunications — traditional crisis management via email or over the phone has been strained to the point of irrelevance thanks to the quickening pace of modern logistics.

While these problems are challenging enough internally, communicating with customers throughout the resolution process can be an even higher hurdle to clear. For instance, while shipping companies may be working with drivers to reroute deliveries given extreme weather or unexpected road closures, it’s also essential to alert customers to the problem, coordinate contingency plans, and provide them with useful, reliable updates — all of which is necessary to maintain customer satisfaction.

 

The problem with the last mile of delivery

 

Who is Impacted By These Problems?

While customers may be able to find temporary solutions to prevent a critical loss of business, issues during the last mile of delivery cause headaches in the short term and lead to issues retaining customers in the long term. This is especially true for quick-serve restaurants such as coffee shops, bakeries, and restaurants who rely on timely shipments and regular communication with shippers to remain competitive.

Every delivery that’s not timely and accurate can mean lost revenue. Over time, customer satisfaction will take a hit and possibly compel them to seek logistics solutions with shippers capable of resolving these issues effectively.

 

SA Tech for the last mile of delivery

 

What Needs to Be Done to Fix This?

In order to quickly resolve these issues and, hopefully, avoid them entirely, shippers and their customers need to deploy sophisticated solutions. Thankfully, new technologies such as the Internet of Things (IoT), artificial intelligence (AI), and data integration platforms can do just that, turning existing data streams into opportunities to drive strategic value.

By leveraging existing technologies at key points of the supply chain, businesses can prepare themselves to improve the last mile of delivery. Vehicles, sensors, existing technologies (i.e. TMS, mobile communication, and onboard computing), and individual team members can work together to provide the end-to-end visibility needed to eliminate delays and maximize efficiencies.

For instance, cutting-edge communication platforms can help employees alert managers to low inventory before there’s a crisis. Stores that are missing essential ingredients can warn suppliers who can then interface with nearby vehicles with the necessary product. Customers waiting on orders can check on drivers’ locations, helping them to understand how issues like heavy traffic or road closures may affect delivery.

 

What Solutions are Available to Help?

Ultimately, businesses should be looking for products that simultaneously boost their situational awareness (SA) and empower them to act on that intelligence. Situational awareness comprises one’s ability to see, contextualize, and understand their present situation, and can be applied both to organizations and to individuals. While many shippers feel that their current systems don’t provide the kind of actionable insights necessary to resolve internal delays and communicate effectively with customers, platforms designed to improve situational awareness can help. Indeed, these platforms synthesize disparate data streams (i.e. camera feeds, temperature data, geolocation) into actionable insights and allow key players to act in such a way that ensures accurate deliveries in the last mile.

By investing in the right platforms — platforms that knit together assets like cameras, sensors, vehicles, and personnel into a real-time, intelligent network — it’s possible to create new efficiencies, address problems before they arise using predictive analytics, and increase the possibility of dynamic changes.