What is last mile logistics? Challenges and solution tips for success in 2024

Last or final mile delivery refers to the final stage of the intricate process of transporting packages and parcels from distribution hubs or warehouses to their ultimate destinations, be it customers’ homes, workplaces, holiday resorts or else. 

In today's competitive logistics market, the final leg of the delivery journey holds immense significance for customer satisfaction. Last mile logistics is the most critical step in the whole delivery process. To thrive in this landscape, where customers demand speedy delivery and impeccable service, every business must optimise all the operations in their final mile logistics.  

In this blog post, we'll delve into last mile delivery, encompassing its problems, challenges, solution ideas future trends. We aim to empower you and your business to meet the industry demands and exceed customer expectations at every turn.  

What are the key problems and challenges in last mile delivery?

In the recent years, customers behaviours have greatly changed with the rise of online shopping. If fast and free delivery was once a nice-to-have option, it’s now the key to consumers’ overall satisfaction.    

Today, most customers expect cheap or even free speedy delivery.  

Once again: free and fast delivery.  

But, final mile delivery costs very often comprise more than 50% of overall shipping fees. If as a company you want to stay competitive and satisfy your consumers, you need to find a way to fight the two biggest problems of last mile delivery logistics – high time consumption and expenses.  

Key challenges in last mile delivery

The final mile logistics can truly be the most complex and challenging part of the entire logistics process. It too often entails:

• inefficiency in order fulfilment,
• poor route planning,  
• lack of real-time parcel tracking,
• failed and lost deliveries,
• outdated technology,
• seasonal demand fluctuations,
• limited access to remote areas,  
• unpredictable transit issues and delays.

All these problems are creating big challenges for the future of last mile delivery. To enhance customer retention is it therefore very important to streamline all operations in the final mile logistics.

6 Solution proposals to last mile delivery challenges:

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1. Improve warehouse-to-customers proximity

Strategically positioning your distribution centres and warehouses closer to where you have high order volumes and many end-consumers is essential in the long-run. This is most often a case in urban areas and enables to businesses to meet shorter delivery time frames – be it next-day delivery or even same-day delivery. At the same time, you can also create convenient pickup and drop-off points for your customers.

Such proximity significantly improves the return on investment (ROI) of your warehouse operations, streamlining inventory management and reducing time constraints and fuel consumption.

2. Embrace technological advancements

Seize the power of cutting-edge technologies and improve real-time data analysis by incorporating machine learning and artificial intelligence (AI) solutions for final mile route optimization.  

By adopting these innovations, your business can increase its ROI potential, reduce overall operational costs, expedite the supply chain cycle and efficiently plan routes for multiple destinations in a single itinerary.

3. Optimise delivery routes

Make sure that couriers utilize the most efficient and cost-effective last mile routes for order deliveries. Precision in route planning can significantly reduce delivery times. Advanced software solutions can automatically schedule routes based on multiple data, such as road congestions and closures, weather conditions, location specifics, vehicle capacity and historical data.  

Furthermore, these systems facilitate real-time communication with delivery drivers, enabling dynamic adjustments to fleet routes based on changing conditions. Additionally, adopting a full truckload model for final mile deliveries can further optimize fuel and mileage expenses while maximizing vehicle productivity.

4. Take advantage of crowdsourcing

The holiday season or peak sales periods often lead to a surge in last mile deliveries, causing numerous challenges. To effectively manage these fluctuations in demand and maintain uninterrupted last mile delivery services, adopt a crowdsourcing approach for your delivery needs.  

By implementing a crowdsourced delivery model, companies can directly connect retailers and customers with local couriers who use their own vehicles. This solution not only reduces operational costs but also offers customers the flexibility to schedule deliveries according to their availability, thereby preventing unsuccessful delivery attempts.

5. Establish real-time customer communication

Consistent, real-time notifications throughout the shipping journey are crucial as nowadays more and more customers demand flexibility in the delivery process, recognizing that they may not always be available to receive their shipments.  

This will not only benefit your customers by keeping them informed but will also ensure smoother deliveries by confirming customer availability at the time of delivery.

6. Implement an efficient and real-time tracking system

A real-time delivery tracking system is pivotal in final mile logistics. Tracking capabilities empower companies to share timely delivery updates with customers, preventing potential issues such as missed schedules, route optimization challenges, lack of proof of delivery and difficulties in supporting contactless payments.  

By deploying advanced solutions, you can streamline operations and optimize efficiency, addressing key challenges within your logistics operations.

Future trends in final mile logistics delivery

The final mile logistics segment is witnessing exciting future trends that are reshaping the logistics landscape: ‍

1. Sustainability and green logistics: Companies have been actively seeking ways to reduce their carbon footprint while maintaining punctual deliveries.
2. Same-day and instant deliveries: The demand for immediate gratification has led to the rise of same-day and instant delivery services.
3. Delivery lockers and storage systems: Convenient pick-up solutions like delivery lockers and storage systems have been becoming increasingly prevalent, esp. in urban areas.
4. Hyperlocal delivery and on-demand services: Customers can expect to receive orders within hours through hyperlocal delivery and on-demand services.
5. ‍Automation and robotics: The two segments are being integrated to cut costs and improve last mile logistics efficiency.

Key takeaways and final mile solutions

As the last mile delivery sector evolves, supply chain professionals must adapt to emerging trends and technologies to stay competitive. Are you successfully adapting your business too?  

With more than 20 years of logistics experience, Van Express can offer tailored supply chain solutions, including final mile deliveries, to meet your business needs.  

Contact us today for a free quote and stay ahead in the dynamic world of last mile logistics.

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