The State of Last Mile Delivery

The State of Last Mile Delivery
How often do you think about last mile delivery? The chances are good that the last mile is an afterthought in your overall transportation strategy, even while thinking about transportation technology procurement. However, the last mile can be the most critical aspect of delivery because it lies with the customer’s actual interaction. And over the last year as buying habits have shifted, last mile delivery has become even more essential in meeting today’s shipping challenges. According to Peter Moore of Logistics Management, “The logistics services industry has taken on a new set of businesses with functions that were largely invisible just a few years ago. Once again, we’re seeing individual entrepreneurs jumping in to fill the last mile “niche” market that will exceed $45 billion.” Let’s take a closer look at the state of last mile delivery going into 2021 and what shippers need to know about it.

The Problems With Last Mile Delivery Have Remained, Even Amid Growth

The problems with last mile delivery are relatively simple, including a lack of visibility into the real-time location of a truck, limited ability to communicate with drivers, and the stop-and-go nature of the last mile. Unfortunately, those problems do not negate a massive surge in last mile delivery, especially as consumers turn to e-commerce as they spend more time at home throughout the pandemic.

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Increased Demand on Last Mile Has Resulted in an Added Focus on Proactive Fleet Management

The increased demand on last mile delivery further incentivized shippers and LSP’s to prioritize fleet management. E-commerce exploded over the last year, amassing growth rates comparable to six years of advancement. Unfortunately, capacity is finite. So, LSP’s and carriers have had to prioritize their operations and embrace proactive fleet management, including tracking fleet location, optimizing asset allocation, and more.

Maintenance and Route Management Strategies Are More Important Than Ever

Part of the process of fleet freight management and making the most effective use of such assets goes back to route optimization and preventive, predictive maintenance of those assets. It is not enough to figure out the best route between cities and primary delivery service areas. Instead, shippers need to look at the larger picture, identifying how optimization can play across multimodal, intermodal, and the last mile to reduce operating costs, maintain control over equipment use, and more.

Drivers and Customers Need More Technology to Stay Informed and Collaborate Through Last Mile

Another factor affecting last mile delivery is the consistent and complete need for more communication and supply chain collaboration from drivers through customers. This is essential and accessible from automated push notifications that can help everyone stay informed throughout the last mile. For instance, UPS rolled out its ability to track deliveries on a live map. It all goes back to using technology to stay informed, reduce risk and attain a higher customer service level.

Major Carriers Have Started to Reinstate Delivery Guarantees Too

Last mile delivery is also at the focal point since the beginning of April as carriers have started to reinstate their existing delivery guarantees. For instance, UPS reinstated its money back guarantee across select services on April 5, 2021. However, those guarantees have specifications or slight changes to their original format, such as having to complete a delivery rather than a time deadline through the end of the day. These on-time, in-full guarantees are all part of getting back the sense of normalcy that has remained so unattainable throughout much of the pandemic.

Increase Your Value and Understanding of the State of Last Mile With the Right Network Partnership

Last mile delivery is a key component of the modern supply chain, and one that cannot be overlooked. Failures in last mile delivery will drive your customers away and to your competitors. Even worse, the diversity of regional, localized carriers and LSPs adds a certain degree of risk in managing last mile delivery. As a result, shippers and large-scale LSPs need a way to manage last mile delivery, understand what is happening within it, consider how the overall market is affecting last mile delivery, and stay strategic. That all goes back to leveraging an advanced, enterprise-class TMS to maximize profitability and align your organization with the state of this particular mode. You can learn more about our acquisition of Cheetah Software Systems, which extends MercuryGate’s TMS platform to deliver a last mile, parcel and less-than-truckload (LTL) solution and an enhanced fleet management capability.

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