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Last mile delivery is a crucial step of the supply chain, responsible for transporting your product to its final destination. Delayed delivery times or lost packages can significantly hurt customer satisfaction as well as a company's reputation if the problem persists. Proactively working to improve last mile delivery should be a priority for all e-commerce companies.
What is Last Mile Delivery?
Last mile delivery is the final step of the supply chain in which the product is transported from a warehouse to the customer's doorstep, completing its journey. This is also known as last mile logistics, last mile distribution, and final mile delivery. Typically the most expensive step of the supply chain, last mile delivery often involves companies footing substantial shipping costs to provide quick and even free shipping options for customers.
Common Challenges of Last Mile Logistics
In addition to claiming the reputation of the most expensive process, last mile logistics is generally the most inefficient as well. This inefficiency is the result of a few common challenges:
- In urban areas, increased traffic congestion slows down delivery times. Even though delivery points may be close in proximity, traffic hinders a driver's ability to get from Point A to Point B within an acceptable amount of time.
- Although rural areas may not experience congested traffic like a city, the distance between delivery points can span several miles. If only a handful of packages are dropped off at each point, the effort expended to transport these items over long distances is disproportionate to the significant cost incurred to deliver minimal product.
- The rise of e-commerce has also impacted last mile logistics as customers' expectations continue to set higher standards, demanding fast delivery at little-to-no cost. Additionally, due to the increase of orders as online shopping continues to rise in popularity, companies must also be able to successfully juggle the delivery of larger and more frequent shipments.
5 Solutions to Improve Last Mile Delivery
By evaluating your existing last mile delivery procedures and identifying opportunities to improve its efficiency, you will feel more confident in your ability to provide a successful first-time delivery to your customers. This further ensures your customers' satisfaction and repeat business. Consider the following 5 solutions when assessing and enhancing the last mile delivery performance of your company:
1. Establish Standard Operating Procedures
Start with the basics – have standard operating procedures been established? If not, create them. Thoroughly analyze data associated with previous final mile deliveries, including load times and service times. Using this data, establish optimal performance benchmarks against which future performance will be measured. Best practices should also be determined that must be followed at every step of a last mile delivery.
With these established standards in place, you will be able to analyze planned versus actual delivery performance. Assess the productivity and accountability of drivers; pinpoint areas of the delivery schedule that must be adjusted to better meet customer demands, and identify performance gaps that when addressed will increase profitability and improve customer satisfaction.
2. Give Customers the Power to Choose
Give a portion of the power to the customer. Allowing the customer to choose from several delivery window options serves two key purposes in improving last mile logistics:
- Increases the probability of first-time success: When customers are allowed to choose the delivery day and time during the checkout process, this increases the probability of a successful first-time delivery as the customer will likely be present to receive the order.
- Increases customer satisfaction: Customer satisfaction is often tied to whether or not a package arrives on time. With customers in command of the delivery time, customer satisfaction increases since orders will be delivered exactly when and where they specified. A flexible fulfillment system that allows customers to alter delivery windows until the day of delivery also increases satisfaction and likelihood of first-time success as customers usually prefer to be present when the package is delivered.
3. Prioritize Customer Communication
Exemplary customer service should be a top priority for every company. In addition to giving the customer the power to choose delivery times, focus on increasing communication with them, too, as their order is packed and transported.
Continual communication from point of purchase to order fulfilment is essential; keep the client informed about the location of their package throughout the supply chain and final mile distribution process. As a proactive solution to common transportation challenges, it decreases the number of customer service calls inquiring about the status of their order as well as increases consumers' confidence and trust in your last mile delivery service.
4. Implement an Effective Tracking System
If packages are frequently lost or misplaced throughout last mile delivery, you've just identified a red flag in your logistics process. Your soluion? Implement an effective tracking system before the product even leaves the warehouse. Throughout the supply chain, you should be able to quickly and easily track an order from placement to delivery. This will allow you to monitor the amount of time it requires for the package to travel it from Point A to Point B then from Point B to Point C and so on.
Gathering this data and comparing against the established standard operating procedures provides insight into the performance of the supply chain, especially final mile logistics. Packages must arrive at the consumer's doorstep in a timely manner to ensure customer satisfaction.
5. Partner with a Third-Party Logistics Vendor
A third-party logistics vendor, also known as a 3PL, is a vendor that fulfils orders for companies. Product will be shipped in bulk from the company to the vendor who then stores it in a warehouse that serves a specific region of customers. When orders are placed, the 3PL is responsible for final transportation and fulfilling last mile delivery. Partnering with a 3PL offers significant benefits:
- Decreases shipping costs: If a company is located on the East Coast yet a large portion of orders are destined for the West Coast, shipping costs will be substantial. A 3PL located nearby areas with high consumer demand saves on costs as less time and mileage is required to deliver the product. Meet demand where demand is highest without sacrificing profit.
- Reduces overhead increases: If a company experiences a sudden influx in sales volume, successfully meeting that demand in a timely manner can prove difficult. A 3PL allows a company to expand its operations quickly to meet the increased demand.
- Maintains or improves customer satisfaction: Partnering with a 3PL will maintain customer satisfaction in the event of increased demand or even improve it by reducing delivery times across the country. Partnering with an industry leader in shipping and other supply chain services can boost performance and profitability.
How Chipman Relocation & Logistics Can Help
Whether your company is located on the East Coast or West, in the North or the South, we provide 3PL warehousing and last mile delivery services throughout the nation. You'll find the most cost-effective and efficient procurement and distribution services for your supply chain needs on any scale at Chipman Relocation & Logistics. To find out more about what we can do to help improve your last mile delivery, explore our services below!