Final Mile Logistics Landscape: Meeting Modern Demands for Service

Final mile logistics faces complexities from delivery demands, returns, and exceptions. Technological innovation and optimization, including AI and autonomous logistics, are key to navigating this changing final mile landscape.

Navigating the final mile logistics landscape requires a keen understanding of relationships, an ongoing commitment to transparency and visibility, and the ability to adapt to increasingly high service expectations.

The term “final mile logistics” is as versatile as the industry itself. Final mile can include any mode and any move type, but today we narrow our focus to the package level. Whether in a B2B or B2C context, this crucial final mile step puts the product in the hands of the end customer. Regardless of whether that customer is a consumer or a business, expectations remain consistent: full visibility, predictive ETAs, and prompt communication. With technology rapidly evolving, final mile logistics offers exciting opportunities for service acceleration and improvement.

In this blog, we look at the current final mile logistics landscape and how to define greatness in final mile. We also examine the way that service expectations demand operational improvement and technological innovation.

Defining Greatness in Final Mile Logistics

The definition of greatness in final mile logistics varies depending on who you ask.

For the customer, excellence is determined by the timely delivery of an intact product. Operational excellence, on the other hand, is the responsibility of companies managing the final mile. Their measure of success extends beyond delivery and into the realms of optimal routing, driver presentation, and efficient billing processes.

Additionally, from a financial standpoint, achieving excellence involves a fine-tuned balance of cost-effectiveness and delivery speed. Ultimately, the best final mile operation is one that aligns with a business’ unique definition of “optimal.”

Optimization in the final mile logistics sphere is not a straightforward task. Variables like fluctuating delivery demands, changing schedules, cancellations, and returns pose potential challenges to even the best-planned operations. Fortunately, emerging technology eases this burden. AI and autonomous logistics can work in tandem to ensure smooth operation even when something veers off course.

Service Expectations and Optimization

Service expectations for final mile are at an unprecedented high. Those expectations will undoubtedly expand with the influence of customers and organization’s internal business goals. Companies must maintain a continuous cycle of optimization in their final mile operations to meet these rising expectations.

This process involves:

  • Monitoring the current state of operations, and
  • Reassessing regularly to respond automatically when the environment changes.
While there are many possible service expectations to consider, we are going to look at two in more detail: returns and exceptions management.

It’s estimated that about 16% of all online orders are returned. Some industries experience an even higher rate: 26% of clothing purchased online is returned, as well as about 19% of orders in the shoes, bags, and accessories categories.

Companies are challenged with facilitating easy (and often free) customer returns at a cost that is ultimately borne by the business. This became particularly prominent during the pandemic. Some retailers found processing returns too expensive and time-consuming, and instead suggested customers keep, discard, or donate the items. This scenario underscores the need for continuous improvement in the reverse logistics space, which can be supported by final mile logistics when done well.

Real-time routing updates and automation are essential for efficiently managing return pickups that can be planned within a delivery route. Capturing and dispatching return requests can’t be done effectively with manual processes. Optimizing returns within a final mile framework requires intelligent, automated technology.

Managing Exceptions

In final mile logistics, exceptions refer to unforeseen events that may disrupt on-time deliveries – anything from traffic accidents, weather, road closures, or added stops. These occurrences present unique challenges that demand a high level of logistics visibility for immediate and proactive response when issues arise.

An optimized system must not only react to these disruptions in real time to alleviate the possibility of a missed delivery but also employ data-driven strategies to prevent a recurrence of the same issue. The optimization process also involves clear guidelines for re-delivery attempts, including the number of attempts and the responsibility for associated costs.

Effective exception management considers factors like time of day, traffic patterns, and unexpected circumstances. By continually adjusting delivery plans based on these variables and communicating updated ETAs to stakeholders, businesses can mitigate the impacts of disruptions. This strategic management and mitigation of exceptions improve overall service quality and customer satisfaction in final mile logistics.

Looking Ahead: Lasting Pandemic Impact and the Role of Final Mile Logistics Technology

The pandemic left an indelible mark on final mile logistics, accelerating the shift toward e-commerce and home delivery. This shift permanently changed how and where we shop, presenting businesses with unique challenges and opportunities in equal measure.
The impact on the workforce cannot be overlooked either, as drivers and warehouse labor continue to be in short supply.
With this in mind, utilizing drivers and vehicles effectively is more critical than ever. Companies can’t afford for drivers to be wasting time and wasting miles when every minute and every dollar counts. As a result, there is increased reliance on outside providers and couriers capable of handling final mile deliveries so companies can enhance their service offerings without extensive internal resource investment. The key to achieving seamless integrations of these new strategies is the application of technology solutions.
From route optimization and carrier management to exception and return processes management, technology is proving instrumental in adapting to and navigating the transformed landscape of final mile logistics.

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Embracing the Future of Final Mile Logistics

Today, we find ourselves living in what we previously imagined as the distant future of final mile delivery. It may seem daunting, but we’re equipped with the right tools and technology to tackle the complexities that arise. 

In these rapidly changing times, MercuryGate stands at the forefront of transportation management, ready to provide solutions tailored to the challenges and opportunities of this new landscape.

MercuryGate is committed to pushing the boundaries of what’s possible in final mile logistics, offering our customers exciting opportunities to enhance their business performance. To learn more about meeting final mile service expectations, including what to do after delivery with billing and carrier settlements and utilizing data to inform decisions, watch “The Final Mile Logistics Landscape Meeting Modern Demands for Service Expectations” webinar now.

Discover final mile solutions during our Logistics Landscape webinar replay.


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