Last mile delivery and carriers – all you need to know about getting your products to your customer’s doorstep...now!
The last year has been terrible for the bricks and mortar High Street, but for those companies already preparing for the inevitable rise of eCommerce, the Covid-19 pandemic proved them justified. And it’s not just the High Street that needs to embrace the advantages technology brings – from inventory control and order fulfilment to packaging and shipment with real-time tracking, your eCommerce business will increasingly rely on last mile delivery and last mile carriers, both forming key parts of Third Party Logistics (3PL), providing those services.
Your customer wants it, and they want it now...more than ever. So let’s take a closer look at this ‘last mile’ standing between you and your customer.
Last mile delivery
Of all the steps in your eCommerce business’ supply chain, the most important is the final one – when you deliver your product to your customer. Because no matter how much investment you put into producing a great product, it won’t count for much if your customer’s delivery experience doesn’t live up to the promise. This is last mile delivery, and it warrants as much, if not more, attention than every other aspect of your business, as this is the one stage you’ll probably have the least control over. So it’s vital you fully understand what’s going on in this phase of your eCommerce business.
So what, exactly, is last mile delivery?
Last mile delivery is the final journey your product makes from the warehouse shelf onto the back of a truck, and then onto your customer’s doorstep. And that seemingly simple shipping process in your company’s supply chain involves inventory, order and real-time tracking, shipping costs...and the technology required to handle all of this and provide an excellent delivery experience for your customer.
Last mile delivery challenges
Predictably, the moment you send your package to your customer, the exponential risks to its prompt arrival multiply. Because this is the stage of the logistical experience that’s most vulnerable to external forces, such as traffic delays. And it also encompasses ‘two-day delivery’ expectations from your customer, shipping costs, and whether real-time tracking is available from your chosen 3PL. And, of course, their overall reliability to provide the effective last mile logistical support your eCommerce business demands.
Shipping cost is a significant factor in last mile delivery, with some studies suggesting they can comprise over half of your total overall costs. And competing with the giant eCommerce retailers on free shipping simply magnifies the issues you face in managing your shipping processes effectively.
So, as an eCommerce business, last mile logistics present you with some significant challenges. There are effective 3PL solutions, though, especially those enabled by fast-growing technology.
Effective solutions for last mile delivery challenges
As in every other aspect of business, and, indeed, life...you get what you pay for. So, when looking for solutions to the challenges you face in getting your package to your customer in the most efficient way possible, bear in mind what you save in cost upfront could later cost you much more if your 3PL supplier was chosen on cost alone...!
Because when it comes to meeting the eCommerce expectations of your customers, where two-day delivery times are now considered the norm, technology provides the tools that deliver most of the solutions to your last mile logistical challenges.
From Warehouse Management Systems (WMS) that accurately speed up inventory control and order fulfilment to improve your eCommerce supply chain, to the growing use of data analysis to predict trends and demands, and from the explosion in crowd-funded 3PL-focused apps to real-time tracking of your package en route, providing a successful delivery experience for your customer is getting easier.
And key to acieving that success is your chosen last mile carrier, so let’s take a look at what they do and who they are.
Last mile carriers
Given the most significant part of any successful eCommerce transaction is the final one, it follows that the process required to deliver this, and the third party last mile carrier entrusted with this responsibility, needs some serious consideration. After all, you’re putting the success of your eCommerce business into the hands of someone with no prior investment or future return on gains in your business. So, last mile carriers live and die by their commitment to their customers and their investment in technology.
And given this responsibility and the vital demands from eCommerce for this service, there’s plenty of choice!
So...what is a last mile carrier?
Simply put, last mile carriers are the shipping companies that deliver your package (product) from its final hub, to its end destination (your customer). And for the two parties involved with this, ie the eCommerce business and their customer, visibility, trust and absolute belief that the package will arrive by the agreed time is of huge importance.
Ensuring this belief becomes reality is a great challenge for last mile carriers. And whether they’re an established company such as FedEx, DHL or USPS (United States Postal Service), or a startup exploiting a local gap in the eCommerce or 3PL market, technology has the solutions. More specifically, last mile and real-time tracking technology.
Last mile carrier tracking
The so-called ‘Amazon effect’ has been both a boon and a burden for eCommerce. By changing the culture of shopping from eager anticipation to ‘I want it, and I want it now!’, it’s raised the bar for all online retailers and eCommerce businesses as they seek solutions to meet that expectation.
And chief among those expectations for both you and your customer is the ability to track the progress of the package as it, hopefully, speeds its way to its final destination.
For you, the eCommerce business, knowing in real time exactly where and in which stage of its journey your product currently is, determines your fulfilment of a successful delivery experience for your customer.
For your customer, eagerly sat at home and awaiting the arrival of your product, knowing when it will arrive, or if it is held up by circumstances outside of your control, could make all the difference between them buying from you again or choosing an eCommerce business that uses 3PL services with last mile carrier tracking.
And real-time tracking technology provides the tools to make that difference.
Top last mile carrier service providers
As you’d expect, this list is dominated by long-established global operators such as FedEx, UPS, DHL and the USPS, and specifically in the UK, Hermes, dpd, and Royal Mail.
But inroads are being made by newer and more agile operators, such as London based Gophr, and Yodel, also UK based, that are quicker to adapt and adopt new technology to feed the ever growing demands of eCommerce and its last mile carrier requirements.
But as eCommerce expansion continues its inexorable growth, its requirements to fulfil its promises to its customers while simultaneously managing to keep the show on the road with its efficient management of its inventory, last mile logistics and ever growing reliance on last mile carriers can only see an increase in this vital and profitable sector.
Last mile delivery trends
As you’d expect in a business increasingly reliant on technological innovation, technology dominates the foreseeable future of last mile delivery. From drones filling the skies to droids and AGVs (Autonomous Ground Vehicles) trundling along your pavement, the future eCommerce world will be dominated by technology that is more science fiction than fact at the moment.
But cost, as in every sphere of business, is always a factor, and of particular focus right now is the balancing act of utilising the growth of the freelancer, or gig economy, to meet the cost-heavy demands of free delivery and free returns. These two byproducts of the Amazon effect show no signs of going away, and any successful eCommerce business will have to find a way to shoulder that cost.
The rise of last mile delivery startups has seen ever more innovative ways of raising the capital to finance their rapid growth. Supplementing traditional financing rounds has been the increasing use of crowdsourcing, as witnessed at Gophr, which in itself resulted from technological innovation.
Commerce is as old as we are, and the final delivery of a product or a service has always been vitally important to its success. But the rise of eCommerce and the increasing expectations it fosters in its customers, plus the cultural shift that now demands instant gratification where before there was anticipation, places a far greater burden on that process than ever before.
And last mile delivery and last mile carriers will continue to come under increasing pressure to meet these demands; both from their clients and their customers.