What is Last Mile Delivery

by Murray Phillips,
May 29, 2024
what is last mile delivery
what is last mile delivery

Table of Contents

Customers demand fast and affordable shipping. Failure to provide these and they wouldn’t hesitate to jump to your competitor.

A significant factor influencing shipping efficiency are last mile deliveries.

Unfortunately, offering fast and affordable last mile delivery services is easier said than done.

Touted as the shortest yet most challenging part of the shipping process, last mile logistics is a challenge that every transport company wants to overcome.

But with the right strategy and technology to back you up, you too can achieve efficiency in this area.

In this article, we’ll talk about last mile logistics, why the transport industry needs to place close attention to it, and how to optimize every step of the last mile delivery process.

What is Last mile Delivery?

Between the time a consumer clicks ‘Buy Now’ and their new potted plant arrives at their door, a lot of things happen in the background.

Orders are received, packed, and sent out for delivery. Last mile delivery is the final step in that process. It’s that step in the entire supply chain where goods leave the warehouse or transportation hub and are sent to their final delivery destination.

Last mile delivery is widely considered as a critical part of the global ecommerce supply chain as well. Given the exponential growth of ecommerce, there’s huge pressure for businesses to get this step right.

The term last mile delivery, or final mile delivery, isn’t exactly just one mile. It’s the total distance your delivery vehicles cover before it reaches the customer’s door.

While it sounds like a no brainer, a lot of factors impact your last mile performance. In fact, a so-called “last mile delivery problem” refers to a series of inefficiencies such as slow delivery times, unhappy customers, failed deliveries, or high shipping costs (leading to lower profits).

Why is Last Mile Delivery Process So challenging?

Most people have received a frustrating notification before, which reads something along the lines of ‘Your package will be delivered between 7am and 10pm’ – even if the item is only travelling a short distance. 

Unlike most legs of a shipping journey, the majority of items in transit on the last mile will have a  different destination. In cases such as consumer products, delivery vehicles can have 50 items in tow.

But that’s just the tip of the iceberg other challenges include:

  • High shipping costs: The last mile is most expensive leg of the supply chain. Labor, fuel surcharges, and vehicle maintenance all contribute to the total cost of last mile deliveries. There are also extra charges such as toll fees and even parking fees that often occur when delivering to urban areas.

  • Complex routes and delivery destinations: Speaking of urban areas, heavy traffic can have a profound impact on delivery time. Moreover, rural areas have more dispersed delivery destinations, aggravating the last mile problem even more.

  • Delivery inefficiencies: Missed deliveries, theft, or failed delivery attempts add to the mounting pressure delivery companies face.

  • Rising customer expectations: Modern customers expect to offer same day delivery or at least rapid delivery services. Fulfilling these expectations while keeping costs low is a challenge of its own.

As challenging as these may seem, addressing the last mile problem is critical for improving customer satisfaction, reducing costs, and enhancing supply chain efficiency.

Why are Last Mile Deliveries Critical for Customer Satisfaction?

Businesses are sprouting everywhere and no matter your industry, the world’s become increasingly competitive.

Amid all this, where customers are the least loyal of any generation, ever, it can be the difference between whether they shop with that retailer again, or not. Simply put, your last mile delivery service is crucial for the retail business you support or work for.

And if you can’t deliver your service to a high enough standard, someone else definitely can.

So what do you most need to get right to keep those consumers happy? 

  1. Fast delivery: consumers want their goods fast. Even in a country as vast the United States, each state is getting used to faster deliveries than ever before. In our cities, same-day delivery is no longer surprising. 

  1. Delivery tracking: Those little notifications telling you that your candles have been dispatched? American consumers have come to expect them every time they place an order. The good news is that precise order tracking is simple with the right order tracking technology.

  1. Security: Consumers want to know if their goods are safe and secure before giving you their hard-earned money. Security should be guaranteed, and you can even offer insurance for orders to cover any potential mishaps.

  2. Convenience: Last mile delivery needs to be seamless and convenient for the consumer. That means clear communication and appropriate delivery time windows (and making sure your drivers can meet those time windows). Of course, optimizing delivery routes and real-time tracking are both feasible with the help of a robust transportation management system.

How Last Mile Optimization Impacts Your Bottom Line

In a traditional brick and mortar store, last mile delivery and purchase happens in a shop. In ecommerce or omnichannel shops, the choice is made with a click of their device and the last mile is largely up to you (with input from your customer).

If you don’t get this part right, that consumer may not return to where they made their purchase. Which means that your customer probably won’t want to return to work with you, either — and p.s., they’ll tell their friends, mom, and their mom’s friends.

There are four main challenges during last mile delivery, and they’re the things you need to get right to stand out from the competition.

  • Cost: Keeping delivery costs as low as you can while ensuring a quality service can be hard. Operational costs can be high, but customers don’t want to spend too much on delivery. 

  • Efficiency: Deliveries must be fast and efficient. A full-featured software that can automate many of your processes will keep you ahead of the game.

  • Communication: We’ve established that consumers expect to be kept updated about their delivery. To really achieve this, you can set your system up to give status updates and even a tracking map if possible. Again for the people in the people in the back: Choose last mile delivery software that gives you 100% visibility into your network.

  • Smooth delivery process: To win repeat business, you need to deliver what you say will, exactly when you say you will. This means focusing on areas of potential delays and miscommunication. Of course, there’ll always be the odd mistake here and there (hopefully rarely). But comprehensive software which also comes with solid support can help you with: 100% visibility along the chain, optimized routes and automated notifications.

Improve Last Mile Delivery Services with TransVirtual

Logistics management is complex, and getting it right requires the proper tools. For your business to remain relevant and competitive in this digital era, using the right technology is critical. 

TransVirtual is a fully-featured Transport Management System that improves your last mile delivery process in many ways. Let’s take a look at those.

Delivery management

Simplicity and efficiency for every delivery so that freight coming in from every direction is easy to manage.

  • Consignment consolidation: multiple consignments going to a single location are automatically consolidated in the app to ensure maximum driver efficiency. Just capture one signature.

  • POD management: delivering freight for multiple customers with a single signature is only really possible when we do the back end work for you. We’ll automatically return the POD back to every sender, in exactly the format they require, live as it happens.

  • Live driver alerts: ensuring your drivers complete the correct process is easier when you can fully customize pop up alerts in the mobile app. Stop/hold freight from being loaded or misdirected and never miss an ATL again with intelligent data mining to trigger driver alerts.

Communication

Whether dealing with consumers or your customer, communication is your key to good service (and customer satisfaction). TransVirtual allows you simple and seamless communication by automating much of the process, so that real-time notifications are triggered by certain actions. Drivers and other personnel can send and receive messages, too, when something needs clearing up. 

Data and analytics

All the data you need is always at your fingertips, because from a single scan to a truck load of pallets or a nationwide network, you can’t manage it without timely and authentic data. 

When it comes to reporting, we know that one size doesn’t fit all. You can personalize how you capture your data with TransVirtual and make it work the way you need it to. We give you the ultimate in reporting flexibility, from simple spreadsheets and customizable PDF’s through to in-depth business analysis.

If you’d like to learn more about your reporting capabilities with TransVirtual, click through to find out more about: meeting your DIFOT KPIs, getting event-based alerts, addressing risks to your business, analyzing performance and managing your equipment. 

Mobile efficiency

To ensure your last mile delivery is seamless, your drivers can use the TransVirtual mobile app on their own device. This can include things like sign on glass, direct customer contact, turn-by-turn navigation and even capturing geotags and timestamps for 100% visibility.

Having this kind of technology available to your whole team means that you will improve in every area of your business. So that your last mile delivery can become seamless, faster and more efficient.

And over to you…

We hope this guide has made it clear just how fundamental technology is to the future of last mile delivery. Of course, we know that choosing and implementing the right technology for your business isn’t easy or simple.

If you’d like to read more, try our guide to implementing a TMS, or how to use TMS software to increase delivery efficiency.

If you’d like to learn more about how TransVirtual can help improve efficiencies for your last mile deliveries, get in touch today for a chat or alternatively you can book a free demo.

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