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How can we describe last-mile logistics in one sentence? Obstacle course.
A true final sprint, this stage is the most dreaded.
With the boom in deliveries and the considerable expansion of the e-commerce sector (with a turnover that reached 112 billion euros in 2020), the last mile is of paramount importance.
It is also the most expensive part. You have to face the facts: facing him is the only way out to avoid falling before the finish line. Optimizing this path is therefore crucial.
This guide dissects the logistics of the last mile and presents several solutions in order to emerge victorious in this fight.
Last mile logistics, also called “Last Mile Logistics”, is a term used mostly in supply chain management. With the accelerated rise of online sales, the “last mile” is at the heart of concerns.
It simply means The final stage of the delivery process. That is, the moment when the good leaves the company (retail store, warehouse, manufacturing plant...) to reach its final destination (the place where the package is received by the final user).
The aim of Last Mile Logistics is to optimize as much as possible the delivery time. However, while it seems fairly simple in principle, last-mile delivery (LDK) is also the most expensive. This is all the more true in the case of a transaction taking place in the field of online commerce. Moreover, this impact does not only affect the financial plan.
The dramatic increase in last-mile deliveries is also having an impact on the traffic congestion. As a ripple effect, the environment is also affected. It is precisely in order to overcome these various problems that more and more companies are now looking for better alternatives to optimize it.
There has been a steady increase in e-commerce sales over the last decade. The Covid-19 health crisis has also reinforced this trend, by supporting the acceleration of online purchases. It would then be 42 million “online shoppers” that ended up on the Internet during the fourth quarter of 2020.
Furthermore, while transactions generally took place between supply chains and the retail sector, today we are witnessing an increasing evolution of the demands and expectations of particular consumers. Moreover, they are the ones who are looking for accessible and fast delivery options.
Unlike the traditional delivery service model, the one we are interested in is one that involves numerous small orders to different locations. And it is precisely these multiple shipments that increase last-mile expenses. This change has thus focused on several issues.
If meeting the challenges of last-mile delivery is a major challenge, it is precisely because the costs associated with this operation are exorbitant. According to a study conducted by Cushman & Wakefield, entitled Last Link: Quantifying the Cost ”, the last mile actually represents more than half of the overall costs of the supply chain. What explains this cost?
Consumer habits are changing and online shopping is exploding. The e-commerce sector is now facing the complexity of customer requirements. The need for personalization and timeliness require a frantic pace and an increase in costs.
For good reason, the establishment of an infrastructure that allows it to be delivered in an increasingly short period of time is already an enormous expense. Especially since express transport (within 24 to 48 hours following the order) is now established as a fundamental service.
With the speed of delivery imposed by major retailers like Amazon (especially with the establishment of programs like Amazon Prime), this is an infallible selling point for all players.
Moreover, the e-commerce sector is not the only sector to suffer from this increase. Online racing is growing in popularity and driving The food sector to develop its logistics. Not to mention that these deliveries of foodstuffs bring a complex traceability challenge. In its study called “The last-mile delivery challenge”, the company Capgemini indicates that in 2020 “37% of French consumers order their groceries online”. The study adds that this figure is likely to reach 49% by 2021.
Shipping and logistics companies should also take into account possible problems and obstacles:
All this is not to mention, of course, the increasing costs of unit deliveries as the goods get closer to their final destination. The last mile would then represent up to 20% of the costs associated with its transport.
In addition to the purely financial aspect, it is interesting to look at logistical problems. In particular, last-mile delivery is affected by several parameters, many of which may be beyond the control of the company.
Some of these challenges include:
It is therefore essential to manage these various delivery constraints, while improving last-mile logistics.
In addition, the exponential growth in requests also implies an increase in storage space and data processing speed. It is then necessary to consider automation solutions adapted to the needs of the company, but also to those of the customer, which is likely to generate even more expenses.
The Last Mile Delivery also has an environmental impact that must be considered. In previous years, deliveries from all sectors combined have peaked. As a result, the number of transport vehicles on urban roads has also increased. Unsurprisingly, this multiplication leads to numerous environmental problems.
More vehicles on the way undeniably mean An increase in pollution. The transport of goods would in fact be responsible for 25% of greenhouse gas emissions in the urban environment.
Likewise, the rise in road transport vehicles is also increasing Traffic congestion. As sales strategies focus on express delivery, the number of cars in service is in turn increasing tenfold. More and more companies are therefore prioritizing speed over optimizing the use of available delivery space.
Likewise, vehicles take longer routes to deliver the same day or the next day, which increases their carbon footprint even more.
However, this trend is not about to be reversed, especially when we know that the e-commerce sector is experiencing a annual growth of 8.5% and that 1.8 billion transactions would have been recorded in 2020 alone.
If online sales players are studying more Last Mile Logistics, because it represents major challenges, both economically, organizationally and ecologically.
Given its importance, it is crucial to look for better alternatives that make it possible to maintain good financial profitability, while adopting a more effective environmental approach.
Since “the customer is king”, it is also essential to take into account consumer satisfaction. Several initiatives are also possible to reconcile all these aspects.
Giving the choice of the delivery time to the final recipient is an undeniable asset in the satisfaction of the latter. In addition, you guarantee a greater chance of success that the courier does not find a closed door. Indeed, absent recipients are a costly problem for any business.
Not to mention that consumer habits are changing. We note that with the health crisis, teleworking is acquiring an important place in the daily lives of customers. This obviously leads to an expansion in delivery schedule preferences.
Shippr already offers tailor-made deliveries. The choice of time and day is customizable and thus makes it possible to meet the requirements of end customers. In addition, Shippr already delivers on weekends and at night. Highly acclaimed by carriers, these services thus bypass traffic jams, a daily problem in urban areas.
Reducing the number of vehicles on the road, noise pollution, but also CO2 emissions, these deliveries are sustainable alternatives for our cities. Not to mention that the customer satisfaction rate is positively impacted.
To overcome the last-mile challenge, many logisticians have now decided to opt for the service Drive. This solution allows the consumer to pay for their order online and to pick up the selected products at a collection point previously set up by the company.
This alternative has proved particularly successful in the food procurement sector. She recorded more than 5,200 points of sale in mass distribution in 2020.
Synonym of a genuine Time saver for the customer, a service Drive also turns out more profitable with respect to warehouse layout and logistics management costs. All this without, of course, losing the factor of speed and direct access to products.
For those who do not have motorized vehicles, there is another option: Pick up in a physical store. The principle is the same: the order is placed online, but in addition to that, consumers have the possibility of reserving from a store stock or a central stock. Not to mention that this strategy allows access to a wider range of products.
Another shipping option is also possible to avoid the problem of home delivery services: relay points. These would indeed be the two most popular solutions by French consumers (according to a FEVAD survey).
This second solution makes it possible to reduce the costs associated with unit deliveries since the packages are deposited at a single relay point. It remains equally profitable for customers since the time constraint is eliminated.
Of course, the carrier also saves time by reducing stopping points. In turn, the reduction in the number of trips makes it possible to limit the emission of greenhouse gases in the atmosphere. In other words, there is something for everyone.
Locker delivery is another great option for better LDK (last-mile delivery).
This solution uses the same principle as pick-up at a relay point, but this time it includes an automatic locker. This ensures, among other things, the security of the package.
From an economic point of view, automatic lockers also have a certain financial advantage. The operating cost is effectively reduced since this option contributes to the acceleration of operations and the fluidity of exchanges.
In addition, the time for receiving the order is optimized. It is therefore an excellent strategy for logistical collaboration.
Flow consolidation (also called “cross-docking”) is particularly useful in mitigating urban congestion. Indeed, this practice consists in preparing orders from a single platform that will take care of sorting.
This logistics mode not only makes it possible to optimize last-mile delivery, but it also offers the possibility of eliminating the need for a storage warehouse or a fleet of vehicles specific to the distributing company.
It thus has an undeniable financial advantage, which is all the more supported by the reduction of carriers on the road. As a result, the savings may be significant enough to increase the profit margin.
Likewise, using flow consolidation gives you better control over due dates and production schedules. The management of the entire supply chain is therefore also optimized.
In addition, it is also possible to pool freight by opting for a single transport vehicle with respect to the distribution of goods of the same category. Group shipments are generally outsourced to specialized service providers.
By working with Shippr, you benefit in particular from a simple solution to facilitate the logistics of orders and thus amortize the current costs associated with last-mile delivery. You also benefit from tech tools that allow you tooptimize tours.
In any case, last-mile logistics will require much less expenses in this case compared to unit shipments. Especially since it is possible to facilitate deliveries in the city center by creating urban logistics space (ELU).
In order to ensure maximum transparency and minimize the risk of absent recipients, informing the customer about the process of their order is essential. Allowing final recipients to track the delivery of their delivery represents a valuable gain in Last Mile Logistics.
With logistics providers like Shippr, you can follow your package in real time. You can also let your end recipient benefit from this technology so that they can best prepare for the arrival of their order.
To do this, automatic communication must be set up. In addition of scheduled emails informing the recipient of the delivery of their package, you also have the power to opt for Customizable SMS. Smartphones are now an extension of our hands, so you are putting every chance on your side for a successful delivery.
Let's not forget that communication and delivery tracking are essential elements in the search for customer satisfaction.
Although the speed of delivery leaves no margin for reducing the ecological impact of last-mile logistics, there are in fact very numerous alternatives to get around this problem.
First, we find in particular the optimization of delivery routes. It is certainly one of the most effective and easiest strategic ways to reduce travel time.
In order to reduce deadlines, it is essential to organize deliveries intelligently. Manual route planning is a real headache for last-mile logistics.
To do this, the best solution is to turn to artificial intelligence. Several tour planning software programs are actually available nowadays. They are great for improving performance for complex delivery operations.
Optimizing routes is already a common topic at Shippr. Thus, the algorithms always calculate the best possible route in order to avoid detours and to be efficient in terms of delivery time.
Second, there are strong arguments in favour of using sustainable means of transport. For example, we think of vehicles that do not use fossil fuels, which are particularly rich in carbon.
New own initiatives include the use of electric or hybrid trucks to ensure last-mile delivery. Other non-polluting means of transport (in particular bicycles) also remain possible.
Finally, while the acquisition of greener vehicles is often considered to be the ultimate solution, another exists: fighting empty volumes. Indeed, express deliveries unfortunately push e-commerce businesses to send a package in a van or a car. The carbon footprint is then disastrous.
To manage not to drive empty volumes, it is necessary to have a varied fleet. Shippr algorithms always adapt the vehicle to the goods to be delivered. Thus, there is no need to transport a bouquet of flowers in a van. Thanks to its large fleet ranging from cargo bikes to 20m3 trucks, delivery people are guaranteed to transport a suitable package.
LDK (last-mile delivery) is of paramount importance, not only in improving stock management, but also in optimizing transport. Especially since opting for a better alternative in this regard makes it possible to reduce the carbon footprint of each company. Between delivery to relay points or automatic lockers, the consolidation of the flow and the sharing of freight, there is no shortage of solutions.
However, a variety of other factors must also be taken into account to ensure that you are making the right choice. In particular, it is essential to find an alternative that is profitable both in terms of price, delivery speed and place of shipment.
As last-mile logistics plays a key role in consumer satisfaction, it is important to offer them useful solutions to track the delivery of their package on the internet. This is an integral part of customer loyalty initiatives.
Outsourcing services is also a much less time-consuming method to consider. Entrusting your logistics to a specialized company like Shippr is quite advantageous. You will benefit from all the services related to the transport of goods: transfer between stores, tours, delivery of fragile, small or bulky packages without forgetting refrigerated transport.
Not to mention that Shippr puts all its technology at the heart of its business in order to optimize this last mile. Finally, in this fight to reduce the costs incurred during this last logistical stage, Shippr is proving to be a major ally. Learn more about what Shippr can do for you.
