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Let’s face it:
• The urban population has ballooned by half of the global urban population.
• The number of smartphone owners has increased from 1 in 100 to 1 in 3.
• The online sales are amplified by five folds.
Over a decade, these three significant changes independently symbolizing one fundamental shift to which logistics industry is striving hard to adapt to the customer’s expectations, that’s drastically changed. The customers are more connected, more wealthy, shop more, and most importantly, expect the things more conveniently and instantly. The bar of prioritization has gradually shifted from searching for inexpensive items to paying more for the great service.
That’s why customers are looking for stores that offer multiple delivery options and alternatives to select the delivery window. Here comes the role of last-mile strategy and the technology leveraged to evolve the last-mile delivery services for meeting the new expectations while maintaining profitability.
The last mile delivery- the final leg of the logistics confronting the challenges to strike a balance between timely delivery, seamless customer experience, new customer requirements management, and competitiveness. The urban consumers that are projected to grow to 60% of the world’s population by 2030 increase the problem by manifolds. Envisioning the future needs, the logistics industry is continuously innovating to realign the last-mile delivery services with digital connected, opinionated, and the informed customer.
The concept of same-day delivery, free delivery, or delivery in an hour brought to the world by leading giants such as Amazon, Walmart, or Target has certainly added convenience to the customer’s life and helped them gained a major share of the market. The mid to small-sized retailers can’t afford to ignore the concept in the last mile in order to scale and excel in the market.
Again, the small inventory negatively impacts the last mile delivery services because the limited number of inventory sources won’t let the retailers deliver the product in the defined window of time that in turn hurt the customer experience.
The companies should use omnichannel inventory approach by increasing the number of inventory sources so that even with the limited number of stores, the company can meet maximum orders which gives a leg up to the last mile. Even, the retailers can consider the vendors who can execute shipping at a faster rate. In this way, the delivery promises are met and the cost of shipping gets lower down.
Many times, when shipper went to store or warehouse to collect the item for the last mile delivery, they found it out-of-the-stock an hour before. The unnecessary trips and unexpected out-of-stock conditions influence the last-mile services. It can be eliminated when order management system (OMS) is integrated with the retailer’s POS so that shipper stays up-to-date with the inventory levels in the real-time.
Moreover, if the allocated retailer’s store inventory doesn’t have the item in the stock or it’s a busy day, then order most likely pushed for the next day. It can be prevented with OMS capability to reallocate another inventory source to shippers so that order will get delivered on time.
The modern customers want multiple shipping options, else they take not more than three seconds to switch to the competitor. Going conventionally, wherein trucking companies provide the fleets and control all the operations with no flexibility to change the size of the fleet as per the customer’s changing demands, that’s disastrous for the company.
The best option is to choose the hybrid fleet system where the right mix of trucks, third-party drivers, freelance drivers, and contractors can be used to meet the multiple shipping needs. With a centralized fleet management system, the companies can best control the operations effortlessly. Besides, it helps in fulfilling the several shipping choices provided to the customers and offer opportunities to meet the customers’ demands cost-effectively.
No one runs the business on guts. If you keep your fingers crossed in the hope all the orders get delivered on time, you are actually playing a guessing game that will make your business die sooner or later. It’s a harsh reality, but true in every sense.
A couple of calls or text messages are not enough at all. Tracking the vehicle and driver in the real-time, getting the shipment details of a single minute, and insights into what’s happening at every step of the order delivery are all-important to deliver high-quality services.
The last mile software provides live tracking facility to both the company and the customers. With real-time visibility into a shipment, the company can even identify the malfunctioning in the vehicle and inform the same to the driver for the safety. The customers also get accurate information regarding the status of an order and can even guide the driver to reach the destination precisely.
Nowadays, the customer’s preference is not just speedy delivery, instead, it’s raised to the option to select when, where, and how the orders to be shipped. The companies are adopting the flexibility in delivery timetable within last-mile services.
For instance, DHL and Volkswagen fitted 50 Polo vehicles providing “in-car delivery” services for the selected customers. The other is Citibox in Spain that has installed smart mailbox within apartment buildings and arranged the drop-offs and pick-ups through the smartphone.
The cost of a product return or undelivered product is quite high that retailers have to bear. That’s why it’s far better to let the customer change the delivery preference such as rescheduling when they are not available at home so that the unnecessary trip to the customer can be avoided and fuel expenses can be saved.
The route planners that are hired to define the routes for the shipment delivery, they make numerous assumptions and don’t take traffic conditions, unexpected weather changes, or poor road conditions into the account while planning, which sometimes leads to erroneous route selection. Thus, the time and fuel expenses to deliver the shipment, and the driver’s attrition will increase.
In the last mile, as the large shipments of goods atomize into thousands of deliveries, allocating the shipments and describing the best route to the drivers cannot be brilliantly handled conventionally. The route optimization feature in the last mile software is the best to consider.
The software processes all the data together in a centralized dashboard, then separate the shipments of the same area and allot it to the respective drivers; consider traffic and weather conditions, road knowledge, and sudden changes to define the route that lets the driver deliver the order in the minimum time and reduced fuel cost; the routes can be dynamically changed and informed to the drivers instantly to let them safely deliver the shipment.
The route optimization with effective linking of GPS and transactional data increases the driver’s productivity, and ensure timely delivery.
The speedy delivery and gaining insights into what customers will order the next are the two ways to sell more to urban customers. With the last mile software, the shipment can be delivered at an accelerated pace through automated route planning, notifications, and pretty more.
The petabytes of data when organized and analyzed through artificial intelligence machine, they unfold valuable data such as when to keep the inventory levels high for which product, how to bring the cost down, the ways to improve services and increase the throughput continuously in an automated fashion. The integration of AI robotics aids in making the last mile services better.
Not to forget the autonomous vehicle such as driverless cars or drones that are taking the driver seat in the last mile delivery due to cost reduction, no driver involvement, and 24/7 services. The research has proven that autonomous vehicles are reducing the cost per parcel in last-mile delivery so they are expected to form the next wave of technology for the last mile. The companies like Walmart that’s embracing it is expected to gain an upper hand in the competition where Amazon has spent millions in building a dedicated logistics network for its last mile.
The processes involved with last-mile delivery are no longer paper-based rather data resides in the cloud and that’s expanding at an astronomical pace. The forward-thinking companies and carriers are building digital capabilities and gaining real-time insights, which in turn, helps in improving the delivery accuracy and efficiency.
The predictive analytics built right into the last mile software identify the data patterns and let the businesses better optimize inventory levels, routes, cost-to-expense ratio, and ecosystem waste. The detailed reports reveal when the right products should be kept ready at the right time and right distribution center; the best route that ensures more orders delivery in the same time and diminished fuel expenses; anything be it driver’s excessive idling, vehicle’s poor performance, or other issues that are impacting timely delivery and increasing overheads can be removed.
Investing in hardware, software, and other capabilities to build transparency in the last mile networks through analytics and performance quantification is worth a penny.
The final words
The modern customer continues to demand solutions that make their lives easier. The convenience, flexibility, and reliability are three success factors that are hidden in plain sight, which carriers and retailers understand the best and warmly-cuddling to improve the last-mile delivery. However, the change is continuous that’s bringing a drastic shift in the last mile solutions year by year.
That’s where technology has the answer. The great degree of flexibility, higher levels of automation, and efficient data harvesting and analyzation allow the logistics operators to increase the performance, productivity, and bottom line. Use the right technology stack with an incremental approach that helps in meeting the requirements, keeping up with the trends, and pursuing goals while maintaining the cost-to-quality ratio.
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