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The last mile has become the most complex and costly segment of the delivery process. It’s the final leg of a product’s journey from the distribution center to its ultimate destination, and it presents a unique set of challenges — more so as we are entering peak season, when we see additional charges by carriers such as FedEx and UPS and increased pressures on capacity as well as service levels. Managing last-mile capacity while controlling these factors is an intricate balancing act that requires innovative solutions, and last-mile platforms are emerging as the answer to this complexity.
The last mile represents the shortest yet most challenging and costly part of a product’s journey. Several factors contribute to its complexity, including geographical diversity, traffic congestion, evolving customer expectations, delivery window variability, and capacity and cost pressures. To address these intricate challenges of last-mile logistics, last-mile platforms are gaining prominence. These platforms offer a suite of solutions and technologies that streamline operations, reduce costs and optimize the capacity of last-mile delivery.
Last-mile platforms utilize sophisticated algorithms to optimize delivery routes, considering factors like traffic, delivery windows and location. This reduces fuel consumption, decreases delivery times and minimizes operational costs. By providing real-time tracking, these platforms enable both customers and logistics providers to monitor the delivery process. This transparency minimizes the risk of failed deliveries and enhances the customer experience.
Last-mile platforms collect and analyze vast amounts of data to identify trends and areas for improvement. This data-driven approach helps in making informed decisions about route planning, vehicle allocation and customer preferences. Efficient inventory management ensures that products are positioned strategically to minimize the distance of the last mile. This helps in decreasing the cost of delivery and increasing delivery speed.
Some last-mile platforms employ dynamic scheduling capabilities that enable real-time adjustments to delivery routes and times. This ensures flexibility in handling unforeseen circumstances. Many platforms integrate crowdsourced and gig economy drivers and couriers, providing on-demand delivery capacity that can be quickly scaled up or down based on demand.
These platforms often include features for customer communication, allowing customers to specify delivery preferences, receive delivery alerts and provide feedback, which ultimately improves customer satisfaction.
By optimizing routes, reducing failed deliveries and enhancing overall efficiency, last-mile platforms help control the costs associated with last-mile logistics. Many platforms also support eco-friendly delivery options, such as electric vehicles and alternative fuels, contributing to a reduction in the environmental impact of last-mile operations.
Now, not every last-mile platform offers all of the above capabilities. These platforms can be defined into several categories, such as last-mile parcel management and optimization with vendors such as Shipium; last-mile delivery management such as FarEye; or last-mile delivery services such as Frayt. This is where the need for last-mile ecosystems comes into play, where multiple vendors partner and collaborate to provide the end customer with a full suite of capabilities.
Last-mile fulfillment remains complex from lightning-speed picking in the warehouse driven by warehouse management, warehouse execution and automation systems to the routing and execution of the transportation to the handoff to an on-demand gig driver or even an autonomous last-mile delivery vehicle or drone. The complexity and cost continue to increase when considering the huge numbers of returns and the many ways returns are handled.
The complexity of last-mile logistics presents a significant challenge for the modern supply chain. However, last-mile platforms are a powerful response to this complexity, offering a wide array of tools and solutions that help manage capacity, reduce costs and improve efficiency. By embracing these platforms, logistics providers and retailers can meet the demands of an evolving e-commerce landscape, delight customers with faster and more convenient delivery options and ultimately make the last mile a less complex and more manageable part of the supply chain.
As technology continues to advance and these ecosystems keep growing, we can expect even more innovative solutions to further streamline the last-mile process and enhance the customer experience.
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About the author
Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.