1) Overview of Last-Mile Delivery in eCommerce
Last-mile delivery can be defined as the final step in a series of processes that make up the entire shipping and delivery process. It is the stage that completes a delivery and ensures that a product has reached its buyer. Since it is the step that is responsible for sending a product into the hands of the buyer, it is often considered the most important stage in the entire delivery life cycle. In this article, we take a look at the dynamics of last-mile delivery and attempt to understand how it works while discussing the challenges associated with, and why businesses need it.
2) How is Last-Mile Delivery Executed
The process of last-mile delivery begins when a product reaches the final hub of the last warehouse from where it will only move to the doorstep of the customer. Here is how last-mile delivery is generally executed:
1) When a product reaches the last hub, a request is placed with the concerned delivery partner to collect it.
2) Once the request is placed, a delivery agent will be assigned to deliver the product.
3) The delivery agent will then arrive at the hub and collect the product.
4) As and when the delivery agent collects the item to be delivered, customers will receive a notification that their order is now out for delivery or other terminology to the same effect.
5) Once the delivery agent is out for delivery, they will then identify the correct address, inform the customer of their arrival and then reach the destination.
6) Finally, after the delivery has reached the destination and handed the product to the customer, the last-mile delivery is completed.
3) What is the Importance of Last-Mile Delivery
The process of last-mile delivery is critical to any retail operation. Since it is the final step of the delivery process, it is directly responsible for ensuring that the product reaches its final destination. Since the last-mile delivery is the culmination of the delivery process, it is also the only stage where the eCommerce platform is able to physically interact with customers via the delivery partner. This makes the step critical to the success of a business as last-mile delivery directly impacts the customer experience.
Steps that take place before the last-mile delivery usually involve large volumes of products being moved together to a single location. Which means the shipping costs per item are lower. However, when it comes to last-mile delivery, delivery agents are responsible for delivering a lesser number of items to several different locations.
This means that the cost of last-mile delivery is significantly larger than the previous stages, making it extremely important to the financial success of a business. Should last-mile delivery be performed poorly, the cost of operations could easily mount and wreak havoc on the accounts of an enterprise.
4)What are the Key Challenges of Last-Mile Delivery and How to Overcome Them
Since last-mile delivery requires micromanagement, it faces several challenges throughout the entire process. Here are some of the biggest challenges faced during last-mile delivery and how businesses can overcome them.
One of the biggest problems that companies face during last-mile delivery is a lack of proper communication with customers. When an item is out for delivery, the customer is generally contacted to make sure they are available to receive the order at the given address. A big issue that plagues the eCommerce industry, issues with communications that lead to failed deliveries and RTOs.
Communication can be hindered for a variety of reasons including such as contact information or network issues. Therefore, a great way to overcome this is to reach out to the customer through multiple channels. This ensures that the customer is made aware of the delivery attempt and can contact the delivery partner to receive the product.
4.2)Fake delivery attempts
Oftentimes it happens that a delivery agent fakes a delivery without actually going to the customer. Such malfeasance is generally left unreported as checks and balances required to monitor if the delivery agent is actually going to the location of the customers are minimal. Fake deliveries can not only be harmful to the company’s revenues but are also capable of damaging the reputation of the seller in the market.
However, the issue of fake deliveries can be overcome through the use of an NDR management system. An NDR (Non-Delivery Report) management software sends a notification to the customer every time a delivery attempt has failed and seeks to identify the cause of such failure. In case of a fake delivery attempt, the customer can inform the eCommerce business of the instance. This not only ensures that the customer receives the product but can also be used to eliminate malpractices in the system and to penalize delivery agents.
4.3)Routes and connectivity
Another critical issue with last-mile delivery is the optimization of routes and connectivity issues. During the last-mile delivery process, the route becomes a critical factor to ensure that the product is delivered within the stipulated time frame and that it is not damaged during transit. Factors such as traffic, weather and blockages, all affect the delivery.
Further, for locations that are not well-connected by roads, last-mile delivery becomes quite difficult. Therefore, optimizing a route is critical to last-mile for several reasons. It ensures that the product reaches the customer on time, while simultaneously making sure that the product is delivered without sustaining any damage. Dynamic routing can also be used to update the delivery agent with the latest information and optimize the delivery route in real-time to navigate environmental changes.
5) What are the Latest trends in Last-Mile Delivery?
Last-mile delivery has been witnessing much innovation for the past few years. These innovations have not only helped the process become more efficient, but also paved the way for future improvements. Here are some of the latest trends that surround last-mile delivery.
5.1) Drone Delivery
The advancements in drone technology have allowed these machines to carry more weight and travel longer distances, for longer periods. Therefore, carriers have been experimenting with drones for executing last-mile deliveries.
The drones are fitted with the products to be delivered and are then flown to the destination where the customer can either collect the items or the drone can drop them off and fly back. The process is extremely fast as flying drones can use the shortest distance possible to the destination without having to navigate roads.
5.2) In-house Logistics
As eCommerce companies are getting larger, they are moving towards in-house logistics operations to create end-to-end experiences and tailored customer engagements. Companies like Amazon and Walmart have been using in-house logistics teams to deliver products to customers. This improves quality control in the delivery process and allows companies to provide additional facilities such as same-day delivery and next-day delivery.
5.3) Mobile warehousing
Mobile warehousing is the process of keeping unsold goods with carriers as they deliver other items. In a sense, the delivery agents become salesmen. Using delivery agents, companies place products that are more likely to sell.
Therefore, as and when an order is placed, the eCommerce platform is able to fulfill the order instantaneously by simply redirecting the delivery agent to the location of the customer in real-time. This not only ensures faster delivery and a better customer experience but is also a cost-effective measure.
Final Conclusive Words
Last-mile delivery is a delicate stage in the delivery process. If anything were to fail at this stage, the entire process fails. While exceptions can be managed when the product is being shipped to the last hub, if an exception occurs during last-mile delivery, the product is likely to be returned to its origin.
This not only causes businesses to lose potential revenue but also dilutes brand reputation. Therefore, businesses must monitor their last-mile delivery operations closely and ensure that they are completed successfully.