Thought Leadership

Ideas that design the supply chain of the future

How business leaders are enhancing their last mile delivery

The journey of any product from the seller to the customer is a story in itself, but the most important step of that journey is that of the product reaching the expectant customers from the shelf of the nearest shipping hub, the one that we know as the ‘last mile’ or the ‘final mile’ of a delivery. Globalization and technology upgradation has made sure that businesses can have access to a huge customer base from all over the world. But It has also made sure customers can now choose from numerous baskets of commodities, get access to desired delivery methods and that had led to an increase in consumer demands concerning their order fulfilment. To match these demands businesses now must come up with cost-effective and faster ways to deliver the products along with maintaining the delivery expectations, to ensure they are ahead of their competitors. This had also boosted the need for efficient, real-time, and technologically efficient supply chain management.

Last year Covid 19 has suddenly pushed the present supply chain management system in top gear. The sudden occurrence of the pandemic has led to an increase in e-commerce sales which in turn has hastened the need of businesses for a holistic digital transformation. Lockdowns across the globe have caused a lot of disruptions that most were not planned for. This affected both sides of the business, with the providers it was driven towards adapting to the new normal with operational changes, while for consumers it has made them more dependent on online delivery which in turn has resulted in consumers demanding faster deliveries as they no longer could go out and instantly buy something from the local stores. The culture of same-day delivery started to take a new turn amidst these challenging times. The global same-day delivery market is predicted to reach $20.36 billion by 2027. So, now is the most crucial time to take a step towards a more improved last–mile delivery process than ever. According to a survey conducted by Invesp, “56% online consumers expect to have same-day delivery while 61% consumers are willing to pay more for the same-day delivery”. So, now more than ever businesses are inclined to faster, cost-efficient, and more real-time last–mile operations to earn brand loyalty through customer satisfaction.

Most businesses in the pandemic faced several challenges in fulfilling customer orders as per their rising demands in terms of shipment delivery time due to last-mile challenges like lack of visibility over shipments or not having smarter route planning. Businesses today are aiming to make their last-mile experience more resilient or to some extent adaptable to the changing logistics ecosystem and unexpected disruptions like the Covid-19 pandemic in the future.

Let’s look at the top two ways in which the businesses are focusing on new technologies to change their last-mile performances and aligning their business logistics towards a much more customer-centric approach are:

  1. Implementation of technology in last-mile tracking and visibility: An increase in demand for same-day or expedited deliveries from customers has pushed the last mile delivery service to offer faster and secure delivery by maintaining good margins which in turn has made look for new and improved last-mile visibility tools. Gaining real-time data insights over their shipments, location of delivery vehicle, delivery status, delays, or revised and accurate ETAs has become the need of the hour for businesses to provide their customer the best delivery experiences in their last mile. The real-time visibility not only helps them in improving their customer satisfaction with prompt updates but also ensures that the safety of the package is not compromised, by reducing the risk of misplacing or losing the product. Moreover, customers could be given full disclosure of the reason for the delivery delays and a warranty of safe delivery of the product. Secondly, smarter last-mile software today can easily optimize the delivery routes and make it cost-effective and time saving. The power of AI has made it possible that there are self-assessing last-mile solutions today, that can assign driver and delivery agents automatically for every single product, thereby taking care of the whole process of dispatch to delivery without any manual effort and also keep the customers updated with notifications or alerts. It even creates a communication channel between the customer and the driver. The value of technology in the last mile can be multi-fold, if the reduction of cost drivers like non-compliance fines, added expenses from unoptimized delivery paths, and even loss of customers due to lack of visibility is considered. So logistics leaders today are realizing more than ever that their main point of contact between their supply chain and their customers, the last mile, needs special focus and immediate digitalization efforts.

  2. The trend of Electric Vehicles or EVs in last-mile delivery: As customers start desiring faster and efficient delivery more and more, the use of Electric Vehicles also starts increasing, to make last-mile deliveries even more customer-centric. Electric Vehicles (EVs) are sustainable, eco–friendly, and highly productive to business supply chains. The pandemic has created a surge in online shopping which in turn has led to a sharp rise in last-mile delivery vehicles on road leading to huge fuel consumption and pollution in form of carbon emission. It is predicted that Last–Mile delivery will persistently increase more and more post-COVID 19, thus leading to 36% more delivery vehicles in inner cities by 2030 thus causing huge traffic congestion and pollution in near future. But, if the last-mile delivery system can be made eco–friendly and sustainable it will reduce emissions, traffic congestions, and delivery costs at one go. EV cars are a step towards reducing the carbon footprint and embracing environmentally friendly green logistics. E-commerce giants like Amazon, Walmart – owned Flipkart, IKEA, etc. are taking initiatives by introducing battery-electric delivery vans, electric vehicles (bikes as well as three-wheelers) to eradicate carbon emissions, global warming, and depleting natural resources by approximately 2025. EVs well as the name suggests run on electricity or at times is a mix of internal combustion engine and electric motor (Plug-in Hybrid Electric Vehicles). These are beneficial for the logistic industry in terms of bottom-line too, as they reduce fuel consumption as well as operating costs. According to a study done by DataLabs in 2020, “battery prices has decreased by 21% in 2019 “, which will promote the parallel reduction of the price of electric vehicles. Moreover, these vehicles don’t need a lot of maintenance or repair as they have a mileage of 80 to 100 miles and can last up to 12 hours before the need for another recharge. So, electric vehicles are definitely worth an investment for future businesses when they plan to take last-mile experiences to the next level by creating a greener leaner supply chain, reducing logistics costs, and also being prepared for the next disruption in the last-mile.

So, as we move forward post-Covid, we can expect more increases in online shopping or automated deliveries as consumers are now accustomed to this new normal. So, to match up with customer expectations businesses must learn and adapt to new and technologically advanced supply chain management. As your consumer demand is becoming more streamlined towards faster, cost-effective and environment-friendly deliveries, what should be your next step as a business to cater to their needs? Should you implement delivery by EVs in your supply chain, or look for an AI-based optimized smart route delivery routes, or should you automate your last-mile visibility and tracking? Let us know in the comments section below.

Are you in the process of evaluating your last mile for a more digitalized setup? Our logistics technology experts might be able to help you. Schedule a demo with us and get to know more about our Highway 905 Last-Mile Delivery Solution – to ensure an optimized delivery execution plan powered by real-time last-mile delivery tracking, delivery management (dispatcher portal and driver app), proof of delivery capture, and more.

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About the author :

Srini Vaidy

President and CEO, Highway 905

Srini Vaidy is the President and CEO of the award-winning, cloud-based logistics technology provider Highway 905. He is an established innovator in the Supply Chain & Logistics space, with an ever-dying passion for coding and technology. For more than 30 years he has been ideating customer-centric and efficiency-driven supply chain execution solutions for the Fortune 500 to help them optimize their logistics costs and strengthen their competitive market position. With one eye on technological trends and the other on the happenings in the logistics space, he likes providing readers with an interesting perspective on the future of logistics industry.