Solutions to overcome the challenges of last mile deliveries

72% of shoppers consider a convenient delivery time slot as a top priority when making online purchases. [1]

Navigating the final stretch of the delivery journey, commonly known as the last mile, presents many challenges for logistics and e-commerce businesses. From traffic congestion to address inaccuracies, the last mile is often the supply chain’s most complex and costly phase.

However, these challenges can be transformed into opportunities with innovation and strategic solutions.

What are the challenges of last-mile deliveries?

Last-mile delivery refers to the final step in the delivery process, when a package is transported from a distribution hub to its ultimate destination, often a customer’s residence. This final leg of the delivery journey significantly impacts customer satisfaction and heavily influences their overall shopping experience.

Here are the biggest challenges of last-mile deliveries.

1. Cost of last-mile deliveries

Last-mile delivery costs are typically composed of several key factors:

• fuel expenses;
• vehicle maintenance;
• driver wages;
• insurance;
• regulatory compliance costs.

By identifying these components, you can understand where your money is going and discover potential areas for savings.

Technology plays a pivotal role in managing and reducing these costs. Advanced technologies such as route optimization software can help reduce fuel consumption and delivery time. Real-time tracking systems can monitor the progress of deliveries and manage delays, ensuring that products arrive on schedule and you don’t incur additional costs.

2. Lack of transparency

Today’s customers expect not only quick and accurate delivery, but also complete visibility into the delivery process. This includes knowing exactly when and where their packages are at any given time. A lack of transparency can lead to customer dissatisfaction, mistrust, and potential loss of business. Any discrepancies in delivery information can lead to negative reviews and damage to the company’s reputation.

Technology can significantly improve transparency in last mile deliveries. Real-time tracking systems, for example, can provide customers with up-to-the-minute information about the status of their deliveries. Not only does this improve customer satisfaction by keeping them informed, but it also allows businesses to monitor their delivery operations more effectively.

3. Failed deliveries

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They can occur due to various reasons such as wrong addresses, the recipient’s absence, lack of safe spots to leave the package, or unexpected situations like traffic jams or vehicle breakdowns. 

In today’s data-driven world, real-time reports and analytics have become powerful tools in identifying delivery bottlenecks and reducing the occurrence of failed deliveries. These tools provide you with crucial insights into the delivery process, highlighting issues as they occur. For instance, if a delivery is delayed due to traffic, real-time reports can immediately flag this issue, allowing you to re-route the delivery or inform the customer promptly about the delay. Such proactive measures can significantly reduce the chances of failed deliveries.

4. Inefficient routing and lack of route optimization

Inefficient routing in last-mile deliveries has a significant impact on both the company and the customer. A study suggests that last-mile delivery costs account for nearly 50% of total logistics costs, out of which a significant portion can be attributed to inefficient routing. This not only increases the operational costs but also leads to longer delivery times, affecting customer satisfaction. Additionally, with the growing environmental concerns, the unnecessary fuel consumption due to inefficient routing adds to the problem. [2]

Photo source: Shutterstock

Automatic order allocation is a solution that can enhance the efficiency of the overall delivery process. Innoship is a solution that uses technology to determine the most suitable carriers based on various factors like order details, pick-up location, destination, and user preferences.

5. Unpredictability in transit

Unpredictability in transit is a common challenge in last-mile delivery. It’s often caused by unforeseen circumstances such as traffic congestion, adverse weather conditions, roadworks, or other unexpected events. 
The impact of unpredictability can be immense. It often leads to extended delivery times, augmented costs due to rerouting or rescheduling, and negative customer experiences. Unpredictability can also lead to operational inefficiencies, as it requires additional resources to manage and resolve these unexpected issues. 

To combat unpredictability in transit, several potential solutions can be implemented.

• Advanced route planning using real-time traffic data can help navigate through or around traffic congestion and roadworks.
• Robust contingency planning is another crucial solution to address unpredictability. This involves having backup plans in place for different scenarios, ensuring that operations can continue smoothly even when unforeseen events occur.
• The use of technology can also greatly assist in managing unpredictability. GPS tracking and real-time updates can keep customers informed about any potential delays or changes to their delivery.

6. Lack of proper delivery infrastructure

One of the most prominent challenges in last-mile deliveries is the lack of proper delivery infrastructure. This includes the absence of well-maintained roads, inadequate storage facilities, non-availability of efficient delivery vehicles, and the lack of advanced technology for tracking and managing deliveries.

For example, in many developing countries, companies struggle with poor road conditions that make it difficult to maintain delivery schedules. Additionally, inadequate storage facilities can result in damaged goods, leading to customer dissatisfaction and financial loss.

Improving delivery infrastructure requires a multifaceted approach. Companies can invest in advanced delivery vehicles that are capable of navigating difficult terrains. The use of technology for route optimization can also enhance delivery efficiency. For instance, GPS tracking and advanced analytics can help in planning the most efficient routes, saving time and reducing fuel costs.

Improving storage facilities is another critical aspect. Companies can leverage innovative solutions like automated warehouses and smart lockers to ensure safe and efficient storage of goods. Additionally, working with local authorities to improve road conditions can significantly enhance delivery efficiency.

How to improve last mile experience by solving last mile problem?

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Improving the last mile delivery experience involves adopting several strategies. One of these includes implementing faster delivery processes through route optimization and reduced delivery times. Route optimization can reduce delivery time by 20%, leading to faster and more reliable deliveries. This not only enhances operational efficiency but also significantly improves the customer experience. [3]

Greater convenience in the delivery process can be achieved through innovative solutions such as same-day or on-demand delivery. According to a survey, 98.1% of respondents stated that delivery influences their brand loyalty. Providing flexible delivery options offers convenience and gives customers control over their deliveries, thus enhancing their overall shopping experience. [4]

Enhanced communication between the customer and the delivery provider is another key solution to improving the last-mile delivery experience. A survey shows that 93% of online buyers want to stay informed and receive constant updates about their deliveries. By offering real-time tracking updates and transparent communication about delivery times and potential issues, trust and confidence in the delivery process can be boosted. [5]

Cost reduction is another critical element in solving last-mile delivery problems. Efficient route planning and reduced failed deliveries can significantly save operational costs. These savings can be passed on to customers, enhancing the overall value proposition.

Finally, increased sustainability in last mile deliveries is becoming increasingly important for environmentally conscious customers. Route optimization and efficient vehicle usage can reduce emissions, thereby decreasing the environmental impact of delivery operations.  

Streamline your e-commerce deliveries effortlessly. Leveraging the power of top-notch e-commerce platforms, integrating Innoship into your system is a breeze, taking just under 3 minutes to enhance and optimize your delivery processes.

Sources

[1] Asgar, Lida. “FlashBox-Toronto.” FlashBox, 21 Feb. 2023, flashbox.co/blog/business/6-stats-highlighting-importance-of-last-mile-delivery-in-e-commerce/. Accessed 9 Nov. 2023.

[2] Driver Logistics. “In the World of Business, Success Often Depends on the Ability to Deliver Products or Services Efficiently and Effectively to the Customer. This Final Leg of the Delivery Process Is Known as the “Last Mile,” and It Can Make or Break a Business.” Linkedin.com, Feb. 2023, www.linkedin.com/pulse/last-mile-efficiency-make-break-factor-your-business-#:~:text=%E2%9C%94%EF%B8%8FAccording%20to%20Forrester%20Research,total%20logistics%20costs%20for%20businesses. Accessed 9 Nov. 2023.

[3] “The Ultimate Guide to Route Optimization: Boosting Efficiency and Reducing Costs.” NextBillion.ai, 22 Feb. 2023, nextbillion.ai/blog/route-optimization-complete-guide-business. Accessed 9 Nov. 2023.

[4] https://www.mageworx.com/blog/author/valery-sha. “On-Time Shipping Makes Your Customers More Loyal.” Mageworx Blog, 26 Sept. 2019, www.mageworx.com/blog/on-time-shipping-makes-customers-more-loyal. Accessed 9 Nov. 2023.

[5] Taylor, Rob. “How a Lack of Delivery Visibility Produces Frustrated Customers.” Digital Commerce 360, 5 Apr. 2019,