The last mile is in the eye of the logistics hurricane. As a key element of e-commerce, it is experiencing a boom period in which efforts to optimize it are accumulating, with technology as its main ally. However, not everything is easy. The need to be faster and more efficient at the same time and the new urban trends make the last mile a huge logistical challenge.
what is the last mile
In logistics, the last mile refers to the distribution link in which the product reaches the hands of the end customer. Despite being the section that involves the least distance, it is the one that has the most proportional influence on the cost (some studies estimate that around 28% of all transport, although there is a great variation depending on the case).
In addition, the unstoppable growth of e-commerce around the world is forcing the last mile to constantly reinvent itself. Because the challenge you face is not easy: deliver in less time, offer more delivery options and do it more economically.
But the challenge of the last mile is rewarded, since it puts us face to face with the client and gives more value to our work. In addition, the e-commerce customer is more likely to share their experiences -positive or negative- on the web and their social networks, which will multiply the echo on the image of the brand of the product and of the brand of the carrier that makes the delivery. . Therefore, having a quality logistics provider becomes even more essential.
New last mile trends
The last mile is immersed in a maelstrom of changes, especially with regard to deliveries to individuals, which we are going to focus on. But what are they?
The end customer is increasingly demanding with their shipments. Until not so long ago, overnight delivery was the only premium delivery option they had. However, currently the deadlines are reduced with each passing day. Scheduled delivery hours, deliveries on the same day, etc.
And the user wants not only to be able to choose the fastest option, but also to have a wide range of options to choose from according to each shipment. Changes in hours, address, home delivery, at a convenience point… It is clear that the more possibilities he has, the better for him and, therefore, the better for the company that manages to offer them.
It is important to remember that, although at the media level everything seems focused on speed, surveys indicate that around 75% of customers still prefer the cheapest option when sending. This percentage decreases slightly among the younger population, but among them it is also the majority who prefer the most profitable deliveries (70%).
But we should not limit ourselves to offering one delivery period or another. In all cases, it is important to clarify expectations and meet deadlines. For example, if we offer a period with a delivery fork of several days, providing the customer with the possibility of seeing the traceability of the shipment will save us problems and calls and will increase their satisfaction.
Knowing the sensitivity of our public to delivery times will help us to find the delivery options they need. According to a survey, 27% of users have ever refused to buy food online because of the delivery period, compared to 26% of those who refused to buy medicine. At the opposite extreme are clothing and cosmetics, both at 9 percent, for which shoppers seem to have less urgency.
forms of distribution
The future that many analysts draw seems to be taken from what until recently we would understand as science fiction. “Get ready for a world in which automated vehicles deliver 80% of the packages,” says a report by the consulting firm McKinsey.
Among these devices would be both drones and autonomously driven vans or trucks that had lockers so that users could pick up their shipments at the doors of their homes. This automation includes navigation systems capable of reacting in real time to traffic and weather conditions and reordering the delivery according to the needs or availability of the recipients.
It also points to mixed options in which the vehicles are automatic in their navigation but have an operator who -in addition to delivering the package- during the journeys can carry out administrative operations: scanning, traceability, delivery management…
Despite the confidence that many show in the future of these systems, the truth is that they still have three important obstacles to overcome. Make the technology cheaper to make it profitable, get legislation developed to delimit the transit of automated vehicles and achieve public acceptance for this type of delivery.
As a trade-off, these technologies open up a host of advantages, such as the ease of extending delivery times and days (especially weekends) in fully automated vehicles. In the case of vehicles with lockers installed, there would be the possibility that, once their usual distribution is finished, they could act as a static convenience point, where people could go to pick up their packages. The McKinsey study, however, shows that users have a strong preference for receiving their purchases at home and for 50% to prefer to go to the point of convenience, the savings would have to be three euros.
Another handicap of convenience points based on smart lockers is the difficulty in housing some products due to their dimensions, as well as the problems that can occur with perishable products.
Curiously, several of the bets for faster courier delivery have opted for a more traditional vehicle: the bicycle, due to its facilities for delivery in large cities. However, the limitations of bicycles mean that their radius of action is smaller and they have to start from warehouses that are already very close to their destination.
When it comes to talking about the last mile, the two problems that first come to mind for logistics companies are two: how to make it more profitable and how to reduce the number of failed first deliveries to individuals.
Absent recipients, incorrect or difficult-to-find addresses, rejected products… the chances for a delivery to fail are almost endless. And it is always a wasted expense. To try to reduce them, companies are using numerous ways: time arrangement, advance notice of delivery, customer management software to keep track of their history, traceability and transparency in the forecast and delivery status, etc.
Given the growth of single-person households and those in which there are usually no members to receive purchases, many individuals have begun to request that deliveries be made to their workplaces. However, there are already several companies that have restricted the delivery of packages to their employees due to the volume and the disruption it entails for the working day.
On the other hand, the increase in the speed of deliveries forces companies to have more facilities, since some of the new deadlines are not compatible with locating the merchandise in central warehouses from which to distribute many kilometers away. In the cases of immediate deliveries, in one or two hours, just a few kilometers can separate the storage place from the destination. Having more warehouses also means needing more stored product to ensure its supply, which increases costs.
Among the problems faced by the last mile, those that it shares with urban logistics (which is carried out in large population centers) are particularly relevant:
Large cities are trying to recover space ceded to road traffic, which means limiting or suppressing vehicle access to certain areas. Especially in the more central areas.
Traffic means travel delays and increased fuel consumption, making some deliveries very inefficient.
Absence of places to park, even for the short space of time necessary to make a parcel delivery.
But, in addition to the problems of urban logistics, it also needs to solve the problems of logistics in rural areas. If it is sometimes difficult to make profitable deliveries in large cities, with a high concentration of shipments, it is also difficult to do so when you take a small number of packages to a distant point. For these cases, various studies point to the use of drones as a possible solution.
Looking to the future of the last mile
If something is clear, it is that the future of the last mile is going to be marked by change. The need to adapt is going to be mandatory for companies and for supply chains. The evolution that technology is experiencing, the legislation regarding new delivery methods, the new needs of the recipients and the progress of e-commerce will draw the future of this vital section for logistics.