5 Ways to Reduce Costs in Middle Mile Logistics

Middle mile logistics is critical to final mile execution.

Understanding middle mile logistics can be difficult when compared to last mile and first mile. Middle mile is the literal middle stage of final-mile transportation. It may involve a degree of long-haul moves within the final mile before transfer to a last-mile delivery carrier.

Middle mile logistics comes with several challenges that shippers need to remember.

Challenges of Managing the Middle Mile

The challenges of managing middle-mile delivery or pickup derive from its highly repetitive nature. Like all things in shipping, repetition can often lead to inefficiency, but why

It comes down to the perception of relative ease associated with the middle mile. The same carriers and processes are typically active within the middle mile, but that opens the door to extensive risks, including:
  • Lack of competition among carriers, resulting in gradual rate hikes well beyond typical expectations.
  • Inability to account for disruptions that arise in the precursory (first mile) or next (last mile) steps as part of the final-mile process.
  • Errors that occur within invoicing and payment processes.
  • Limited scalability due to a lack of annual, competitive bidding practices.
  • Lack of end-to-end visibility makes it difficult to reduce middle-mile costs.
  • Working within a single mode in the middle-mile logistics delivery and pickup, leaving money on the table that might exist with intermodal or multimodal transportation.
  • Fluctuations within the middle mile and demand for capacity that accompanies disruption, whether expected (peak season) or unplanned (e-commerce surge since early 2020).

How to Optimize Middle Mile Logistics to Reduce Costs

All freight, regardless of the channel of origin (online or brick-and-mortar), must travel through the middle mile in some form. This universal need for middle-mile visibility leads to increased opportunities for optimization. 

As the middle mile increases in value, “there will be pressure on railroads, trucking companies, intermodal third-parties and ports to develop a cost- and time-effective service that links the largest distribution centers in national networks.” 

Remember, middle-mile logistics links different warehouses to provide that middle leg between the first and last mile. 

Following these five practices can help your company get more value in the middle mile:

  1. Know the variances in rates between lanes, including, why lane rates have changed, their likely trends in the short-term future, and which lanes will be the easiest for your team to cover.
  2. Capture and analyze data to understand middle-mile logistics costs and opportunities for improvement with a centralized supply chain control tower. Leverage data insights to increase bargaining power during annual and short-term RFPs.
  3. Consider the impact of wait times and changes at the distribution centers or warehouses that may affect middle mile turn times. Reroute other shipments, such as couriers in the last mile, to account for delays or changes within the middle mile.
  4. Keep drivers informed of all activities with real-time status updates and push notifications, avoiding excess idle time and the risk of higher accessorials like detention charges.
  5. Leverage digital document management tools to eliminate the hassle of handoff upon unloading/loading at the beginning or end of the middle mile, providing more visibility throughout all final mile legs as well.

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Derive More Value From Middle Mile Logistics

The middle mile is the most consistent and reliable phase of final mile logistics. It is almost synonymous with long-haul transportation. 

However, the middle mile is ripe for automation and the use of technology to continuously drive improvements that ensure your team is getting the right rate, for the right service level, at the right time.

see how your team can maximize efficiency within all modes of transportation

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