CSCMP’s 2022 EDGE Supply Chain Conference delivered impactful content on today’s most pressing supply chain issues, including last mile delivery optimization.
The theme for EDGE 2022, Positioned to Win, allowed hundreds of exhibitors and speakers to deliver the latest innovations, strategies, and best practices for gaining a competitive advantage in spite of the ever-evolving state of global logistics. Breakout sessions focused on critical supply chain components, including network optimization, talent recruitment and retention, sustainability, process automation, and last mile delivery.
MercuryGate team members attended EDGE 2022, to share insights and provide product demonstrations for solutions addressing supply chain management trends.
- MercuryGate VP of Sales Jeff Groenke presented alongside MercuryConnect partner Surge Transportation and Campbell Soup Company.
- MercuryGate Co-Founder and Chief Innovation officer Steve Blough and Advisory Pre-Sales Consultant John Martin presented Town Hall Session II.
In both sessions, our MercuryGate team highlighted challenges and solutions focused on the most visible leg of the transportation journey – the last mile. Let’s examine why last mile logistics merits so much attention at the premiere event for supply chain management.
Why Last Mile Delivery Matters
Supply chain logistics are becoming increasingly complex as consumer preference shifts toward e-commerce convenience over traditional retail avenues. Suddenly shippers find themselves in an environment governed by last mile delivery capabilities and consumer expectations for speed and visibility.
Consider these recent findings on consumer habits and final mile delivery:
- U.S. e-commerce sales totaled $870 billion in 2021, a 50.5% increase over 2019. While this upward trajectory cooled as COVID restrictions relaxed and storefront retailers resumed operations, e-commerce increased by 6.8% YoY in the second quarter of 2022. (U.S. Department of Commerce Retail Indicator Division)
- 99% of companies report plans to offer same-day delivery by 2025 – compared to 35% that offer it today.
- Last mile delivery costs are substantial – comprising 53% of the total cost of shipping.
- And from a carbon emissions perspective: Urban last mile delivery emissions are on track to increase more than 30% by 2030 in the top 100 global cities.
Last Mile Delivery Optimization
Last mile optimization refers to organizing delivery services and methods to improve customer experience and meet customer expectations. Last mile delivery optimization takes many forms depending on the industry, commodity, and start and end destinations. However, three primary optimization processes can be applied to most final mile delivery networks.
Batch Routing Before Loading
The standard for years of batch routing is based on a set idea of what tomorrow will hold for shipments. It requires dynamic routing processes that represent pick-up locations, delivery locations, and delivery attributes for each shipment loaded onto a truck. Load layout is strategically arranged to coincide with the truck’s most optimal and efficient routes.
Within Route Optimization
A newer approach to final mile delivery within route optimization allows for more flexibility based on real-time conditions. Optimizing deliveries within a pre-planned route allows shippers to change delivery times and orders to accommodate the best delivery deadlines, customer needs, cargo specifications, and other factors affecting the first, middle, and final mile. This can be a vital option for shippers operating in volatile and uncertain markets.
Dynamic, On-Demand Routing
The newest and most flexible method of last mile delivery optimization is dynamic rerouting, which enables real-time entry of new shipments into the route at any given time, providing shippers with the highest degree of control to meet last-minute customer demand. Dynamic rerouting also adapts to unexpected changes in delivery conditions due to traffic, weather, or other disruptions. Moves and stops are continuously optimized to maximize available physical and labor resources. With these advanced capabilities, dynamic rerouting can increase same-day revenue streams, help control delivery costs, and make meaningful carbon footprint reductions within the final mile.
As last mile delivery becomes more dynamic and adaptable, the need for visibility and highly advanced transportation management systems (TMS) increases.
TMS for Last Mile Delivery Optimization and Visibility
Overcome Adversity in the Last Mile Delivery
A last mile delivery platform empowers businesses to cater to ever-increasing customer expectations and achieve operational efficiency. The problem: many companies do not have such a platform. As a result, many fail to meet customer needs and company goals.
To learn more about how optimization helps you overcome adversity in your last mile, be sure to download our eBook. See how logistics managers, shippers, and carriers adjust their final mile transportation strategies based on real-time conditions.