As more consumers turn to e-commerce for their needs, quick fulfillment and distribution has become an expectation for every online purchase. Businesses are rising to the challenge by developing new technologies to expedite deliveries however the last mile continues to present a challenge for most companies.
Why Last-Mile Delivery is a Challenge
The goal of last-mile delivery is to get packages to their destination as quickly and cost-effectively as possible. However, the challenges the last mile presents continue to be a pain point for most companies. The final portion of the delivery journey usually involves multiple stops with low drop sizes, which adds to both the cost and time spent on the delivery. Delivery to rural areas takes even longer with each stop potentially being miles apart. Yet e-commerce customers expect fast and free delivery, regardless of location.
As e-commerce demand has grown since the pandemic, and will most likely continue to grow in 2022, businesses need to be able to figure out the final mile of delivery in order to continue to make money. After all, last-mile delivery costs are about 53% of the overall cost of shipping so it can significantly impact the bottom line.
What to Expect in 2022
Last-mile delivery will remain an important component of the shipping process in 2022 as well. There are several things to look for in the upcoming year in terms of customer expectations as well as ways to lessen the financial burden of the final mile.
Customer Experience: The consumer wants their purchase even faster than ever and the ability to see where it is at every step along the way. The days of waiting for a package to arrive without knowing where it is are long gone and businesses must adapt. Retailers like Amazon are creating an enhanced customer experience with increased visibility as well as notification as to when the item has arrived. Faster delivery costs money, but for most consumers, the cost is hidden in the price of the item.
Greener Deliveries: Customers also want packaging and delivery that is environmentally conscious, which means some choose a slower or greener form of delivery so they can be packaged and delivered together. The faster options are usually not the greenest ones. But for those customers that are willing to wait an extra day or two, a company has more time to make cost-efficient deliveries. Numerous companies are now offering different options that offset the carbon footprint of delivery with the use of new technologies. Electric vehicles, for example, can be utilized for certain portions of the delivery process. In the future, hydrogen-powered vehicles might be used to get a longer range than electric vehicles.
Data-Driven Decision Making: Technology is also providing a new way to look at data and how to make the best decisions based on the data. Algorithms can be used to optimize packaging and minimize the size of deliveries for certain modes of transportation. They can also increase efficiencies in how trucks and vans are loaded to use more space.
Route Optimization: Route optimization is a type of last-mile delivery software that helps to manage a delivery fleet, increase delivery capacity and minimize failed deliveries by finding the shortest and most cost-efficient route to handle deliveries. This is especially important for the last mile in which multiple stops are being made. It also provides real-time GPS tracking that can be used to find the location of all drivers and their packages.
Urban Fulfillment Centers: E-commerce retailers are turning physical retail stores that have closed their doors into urban warehouses. Fulfillment centers in heavily populated areas allow businesses fast access to a large volume of people and cuts the cost of deliveries. For example, Amazon fulfillment centers are popping up in metropolitan areas all over the country.
Data-driven decision-making and sustainable transportation will really come into play in the upcoming year. Retailers will need to offer more options for consumers to offset carbon emissions. In order to survive in the current shipping market, businesses will need to concentrate on making the last mile of delivery more efficient.
Your Trusted Partner
At Red Arrow Logistics, we provide expertise and white glove customer service with fast-growing, complex, and high-value supply chains. As the next-generation model of logistics companies, we offer tailored transportation and logistics solutions — from single shipments to complex over-dimensional and international orders.
Red Arrow offers the scale and scope of services including air, ocean, and ground transportation to meet the budget and schedule requirements of the largest and smallest companies alike. If we can be of assistance, please email us at email@example.com or give us a call at 425-747-7914.