To simply understand the last mile delivery meaning and insider secrets to success, you need to have in mind the mile logistics and mile problems experienced by logistics companies.
The customers are always looking for same-day delivery at an almost free shipping cost. How do you achieve this?
Last mile delivery meaning in supply chain management refers to the process of moving goods and people from a transportation hub or warehouse to the customer’s doorstep.
For example, when you order products from an e-commerce shop such as Amazon or eBay one will select the product with the lowest or free shipping cost and companies need to factor in this requirement in chain costs to ensure they attract customers for their products. In fact, investing in a successful delivery process helps build customer’s trust hence improving the customer’s retention.
Types of Last Mile Delivery
Gig economy delivery
Companies such as Airbnb and Uber have given rise to the influx of the gig economy. Uber can be used to make it easy to deliver goods and people from one point through the use of technology.
In fact, 60% of the supply chain cost is delivery and the implementation of robotics in delivery is a great way to subsidise on cost.
These facilities can be used as pick points where customers who can access the 3pl warehouse can visit the warehouse to pick up their products. The urban warehouses also serve as the central distribution point for the specific urban settlement.
Some companies have the capacity to manage the delivery of products from their warehouse and they have their own fleet management system eliminating the need to outsource 3PL providers
Benefits of Last Mile Delivery
Increases scalability and profitability
As a matter of fact, using the last mile delivery(or final destination) system ensures all products are transported from the warehouse to the customers without idling while following the shortest route possible to the specific home address. This increases the fleet productivity hence increasing the profits for the company in the long run.
Using the last mile delivery system a company can easily deploy an external company to help with transportation during peak hours in case the in-house talent is overwhelmed.
It is super easy to calculate the deliveries based on the number of goods transported to a specific route per day.
The last mile delivery system is efficient for companies as it helps scale deliveries per day using optimised. Again, it increases the customer loyalty hence high customer retention which translates into increased profits.
Ease of delivery
In reality, the dream of any company is to ensure they satisfy their customers if they plan to be in business for the long-term. To achieve this at a cost effective plan you need a great last mile delivery strategy. With an effective strategy it is easy to transport goods from Point A to Point B.
Boosts transparency, customer engagement, and retention
In this world of technology, every company is using a mobile app to track delivery. A mobile app will show the delivery process step by step until the goods are at your doorstep hence increasing transparency.
The fact that a customer will determine the exact time she or he will be available makes the process effective and trustworthy. Making the customer feel safe and trust your brand services will increase engagement and retention.
Last Mile Delivery Costs
As a matter of fact, any supply chain expert will inform you that the final destination is the most expensive process in the supply chain for logistics companies.
The average cost per delivered package in the US is $10 while companies charge clients an average of $8-$9. However, the final mile delivery for items such as ovens, fridges, electrical appliances, and more costs on average $50 per package.
According to Stata, the average cost per failed delivery cost retail executives $17.2 and GBP 11.6 in the US and UK respectively.
3PL Last Mile Delivery
What is 3PL – It simply means a third-party logistics provider. These companies have increased in popularity in recent years competing with shipping companies.
They use inventory management systems to track movement of goods from the e-commerce and distributor. The implementation of technology has made it easy to track movement of the products. The companies have warehouses where they can route products for a specific region.
Partnering with a 3PL provider has enormous benefits.
Many third-party logistics companies have fulfillment centers in different regions making it easy to route goods within a quick turnaround time.
Makes it easy for e-commerce companies to manage pick time
3PL companies have enough man-power to manage pick time as delivery is their main job. This helps e-commerce owners to focus on other tasks increasing productivity.
For instance, routing a whole state such as Texas from a central location can be time consuming. 3PL companies save time by creating warehouses in different cities within a state and routing the cities. Routing smaller regions makes the delivery seamless and real time.
Any customer shopping online expects that the delivery will be as fast as possible without glitches. Handling the delivery as an E-commerce business can be tiring and time consuming. Therefore, the need to partner with 3PL companies to make the delivery process easy, fast, seamless, and successful.
When the process is successful as per the customers expectations the customer will be satisfied and may become a returning customer.
In reality, to increase the profit margins for your e-commerce business requires you eliminate unnecessary costs. By partnering with 3PL service providers you will have eliminated the unnecessary delivery follow ups which are time consuming and help you focus on generating more customers hence business growth is achieved.