If transportation and logistics had a mash-up, it would probably be the final mile.
From box trucks to big rigs, the delivery world seems to be merging into the final mile. Non-dock deliveries account for about 6 to 10 percent of present-day less-than-truckload (LTL) volumes, according to estimates from information technology (IT) company eTrac, which partnered with FreightWaves for a May 23 webinar on how to master the final-mile process. Third-party logistics providers (3PLs), firms that help manage the shipping and logistics process for their customers, are busy ramping up their final-mile capabilities to fill what for many 3PLs has been a hole in their portfolios.
There are today about 6,000 final-mile carriers in the U.S., according to eTrac. Most of them are traditional courier and messenger companies, typically local outfits with one or two locations in a city, that have re-invented themselves with a few vehicles to support the insatiable demand for e-commerce fulfillment, eTrac said. Many of these carriers service multiple verticals. Some don’t have the software needed to communicate with their customers.
As with any business segment that takes off as rapidly as final-mile, there is no shortage of chaos. Standards for information flow are virtually non-existent. Multiple IT platforms abound to distribute and pull in critical data. Compliance and reporting tools are fragmented. The 60- to 120-day lead times normally associated with data integration have been compressed to virtually zero; it is becoming commonplace for an IT platform to go live when the service does, and without any dress rehearsals.
The lack of standardization can undermine the most established business-to-business shipping networks. In the new world of last-mile delivery, where streets and curbs become part of the distribution landscape, shippers court disaster. Drivers hustling to service unforgiving consumers are given strict delivery windows, but are left unaware of such impediments as one-way streets, traffic congestion or road construction that can easily delay the arrival of the goods.
eTrac, based in Alpharetta, Georgia, specializes in connecting shippers and 3PLs with their carriers through the carrier’s IT system, eliminating the need to funnel data through third-party portals which can lead to slow status updates, and add friction to a time-critical process. “Portals are not good for final-mile operations,” Danny Barfield, eTrac’s executive vice president, said during the webinar.
By leveraging one integration point for data connections and interchange, eTrac said it gives shippers the opportunity to efficiently scale their carrier relationships without the complexity of managing a network of carriers who are typically delivering a diverse array of goods. eTrac will even provide systems to those carriers that don’t have them, it says.
In some ways, eTrac is functioning like a final-mile consultant, a discipline which is likely to take off as demand spikes and businesses struggle for a path forward. The consultant world is likely to become bifurcated, with some working exclusively with shippers and others only with carriers.
The final mile has become the most robust segment of transportation. Much of the work being performed by final-mile carriers is new and diverse. In addition, more resources are available than ever to simplify the process, and additional support will come on-line as the category grows.
For all that’s new, however, some traditional rules still apply. The final-mile carrier, and the driver delivering the goods, has become the “customer interaction point,” according to eTrac executives. Though the vast majority of drivers operate as independent contractors, they are the face of the shipper to the stakeholder that can make or break the relationship. Shipper expectations of their carriers need to be established and be clearly defined before a contract is signed. Independent carriers have more skin in the game than does a company driver that can’t easily be terminated if things go wrong. Yet good final-mile operators are not a dime a dozen, and failing to provide them with the proper implementation tools will likely lead to a negative outcome for all concerned. (www.etracfinalmile.com)