Last-Mile Delivery: A Complete Directory for Logistics Professionals  

Last-mile delivery in logistics refers to the final step in the supply chain, where goods are transported from a distribution hub to the customer’s dock or door. This stage directly impacts customer satisfaction and brand loyalty as it represents the most visible part of the delivery process. For instance, delivering a package from a local depot to a customer’s residence is a good example of last-mile delivery. 

Similarly, last-mile delivery in logistics encompasses the planning, execution, and optimization of this delivery process to ensure maximum efficiency and satisfaction. By streamlining operations, businesses can reduce costs and improve delivery reliability. An example includes using route optimization software to meet delivery deadlines within narrow time windows. 

The term final mile is often used interchangeably with "last mile" and highlights the same critical challenges and opportunities. Strategies such as delivering fresh groceries within hours of ordering illustrate how businesses tackle these challenges effectively. 

Centralized routing consolidates routing tasks for an entire company from a centralized location. For example, a centralized team optimizing routes across multiple branches ensures streamlined operations. 

In contrast, distributed routing is performed locally at branch offices, depots, or distribution centers by people with specific localized knowledge.  

Dynamic re-routing adjusts delivery routes on the fly to respond to traffic, weather, or unforeseen disruptions. This ensures delivery timelines are met even under challenging conditions, such as rerouting around an accident to avoid delays. 

ePOD provides a digital acknowledgment of successful delivery through apps or handheld devices. This eliminates costly paperwork and enhances recordkeeping, such as a driver capturing a customer’s digital signature upon delivery. 

Learn more about the operational benefits of ePOD in this video. 

Real-time visibility allows businesses and customers to track deliveries live, enhancing transparency and reducing inquiries about order status. A common example is an order tracking app showing customers exactly when their package will arrive. 

Route optimization uses advanced algorithms to determine the most efficient delivery routes, factoring in variables like traffic, time windows, and vehicle capacity. This technology helps maximize fleet productivity while minimizing fuel costs. For instance, software can reroute drivers to avoid sudden road closures, saving time and resources. 

Watch the video: Learn about the differences between batch and continuous route optimization and which is superior. 

Telematics integrates telecommunications and informatics to monitor and manage driver and fleet performance in real time. This enables proactive decision-making and ensures compliance with safety standards. An example includes tracking vehicle speed and fuel consumption through onboard systems, helping to optimize operations. 

Delivery methods minimizing physical interactions between distributors and customers, often via digital confirmation (e.g., mobile app or SMS) or designated drop-off points. These methods gained popularity during the COVID-19 pandemic and remain essential for customer safety and convenience. 
 

Leveraging independent contractors or gig workers to fulfill last-mile delivery needs, offering scalability and flexibility for businesses during peak demand. 

Daily route planning, also known as operational route planning, is the process of creating optimized delivery routes and sequences based on customer orders for a specific day or timeframe. It aims to:  

• Minimize delivery costs. 
• Improve fleet productivity. 
• Enhance customer satisfaction while ensuring routes are practical and comply with business rules, time windows, and operational policies 

This process considers variables such as delivery locations, order volumes, vehicle capacities, and driver schedules to create efficient and executable plans. By optimizing routes, businesses can reduce travel distance, save fuel, and improve utilization of delivery resources. 

A routing methodology where an algorithm creates routes based on customer information, equipment information, and the business rules and constraints to create routes that balance customer service and costs. Dynamic route planning provides the most optimal results based on specific business objectives. 

A logistics strategy where a central hub serves as the storage and sorting facility, and goods are dispatched to local “spokes” for final delivery. 

Hybrid route planning combines static and dynamic routing into a single, technology-driven process. It allows priority customers to be serviced on fixed delivery patterns at the start of the route, while other customers are added dynamically. This approach reduces delivery costs and enhances customer service by balancing efficiency with flexibility. 

An example of how hybrid stops can be incorporated on a route with dynamic ones.

This route planning method, commonly known as master or fixed route planning in the world of last-mile logistics, involves creating a route with a fixed set of customers in a fixed or prioritized order. The primary advantage of this approach is the reliability and predictability it offers customers regarding their deliveries or services. 
 

Urban or suburban warehouses strategically located to reduce delivery times in densely populated areas. These hubs often leverage robotics and automation to handle inventory efficiently. 
 

A strategy to use historical information to create optimal territories and routes for drivers, sales reps, and merchandisers based on business rules and constraints as well as customer and equipment attributes. 

A routing methodology that considers orders across a period where orders could be placed on a route during any point in that span. 

The average amount of time required to deliver an order from a truck to the customer, including activities such as unloading, customer interactions, and obtaining proof of delivery. This metric impacts route productivity, labor costs, and customer satisfaction, with factors such as goods type, customer needs, and delivery technologies influencing its efficiency. 

Calculated by dividing total delivery expenses by the number of deliveries, offering insight into operational efficiency. 
Considerations: Labor, fuel, maintenance, and technology costs. 

The cost per mile/kilometer to deliver each order. 

A metric that measures a customer’s satisfaction with their delivery experience, typically obtained through post-delivery surveys or feedback forms. In last-mile delivery logistics, customer satisfaction score (CSAT) reflects key factors such as:  

• On-time delivery 
• The professionalism of drivers 
• The condition of goods upon arrival 
• The accuracy of delivery time windows 

A high CSAT indicates a positive customer experience, which can boost loyalty, drive repeat business, and enhance brand reputation. Improving CSAT in last-mile delivery often involves optimizing delivery routes, providing real-time tracking updates, and promptly addressing issues such as missed deliveries or damaged goods. 

The percentage of deliveries completed on the first attempt, minimizing returns or re-delivery. Achieving a high FADR is critical for reducing operational costs, enhancing customer service, and protecting brand reputation. 

Example: Ensuring accurate addresses and delivery time windows improves this metric. 

The percentage of time that a delivery was made outside of the preferred delivery window or time window.  

Measures the percentage of deliveries completed within the promised time frame. High OTD rates signify reliability and customer satisfaction. 
Benchmark: 95%+ for industry leaders. 

The number of actual miles or kilometers traveled beyond the planned route distance. These deviations can result from factors such as driver errors, unexpected road closures, or unplanned stops.  

Minimizing out-of-route miles is crucial for reducing fuel costs, improving delivery efficiency, and maintaining tighter schedules. Advanced route optimization tools and real-time GPS tracking can help mitigate these inefficiencies by providing drivers with updated guidance and ensuring adherence to the planned route. 

The percentage of time a vehicle is actively in use compared to the total time it is available. This metric measures fleet efficiency and helps identify underutilized assets, which can lead to cost savings and better resource allocation.  

A high utilization rate indicates efficient use of vehicles, while a low rate may signal opportunities to optimize scheduling, reduce fleet size, or reassign resources. This metric is vital for managing operating costs, improving delivery capacity, and maximizing ROI in fleet assets. 

The number of deliveries completed within a specific geographic area. Higher delivery density is crucial for improving operational efficiency because it reduces travel time and fuel consumption between stops.  

High-density areas allow for better route optimization, lower delivery costs, and increased driver productivity. Conversely, low-density delivery zones often result in higher costs per delivery due to longer travel distances and fewer stops per route. Strategies such as consolidating orders, leveraging micro-fulfillment centers, and scheduling deliveries in clusters can help increase delivery density and enhance overall efficiency. 

Failed deliveries occur when orders cannot be completed, often due to customer absence, incorrect addresses, or inaccessible delivery locations. These failures are costly in last-mile logistics, as they require redelivery attempts, increase fuel consumption, and strain operational resources. 

Minimizing failed deliveries improves efficiency and customer satisfaction. Solutions include offering flexible delivery time windows, utilizing real-time tracking and automated notifications to ensure customer availability, and implementing address verification tools to reduce errors. 

Reverse logistics involves managing goods returned by customers for reasons such as exchanges, recycling, or disposal. It’s essential for reducing costs, minimizing waste, and improving customer satisfaction by streamlining returns and exchanges. Poor reverse logistics can increase inefficiencies and harm customer loyalty.  

Urban congestion refers to the traffic and infrastructure challenges that slow down deliveries in densely populated urban areas. These issues can include narrow streets, limited parking, construction zones, and high volumes of vehicles, all of which contribute to delivery delays. 

In last-mile delivery, urban congestion significantly impacts efficiency by increasing travel times, fuel consumption, and operational costs. It also affects customer satisfaction when delays cause missed delivery windows or late arrivals. 

Customer service in final-mile delivery involves balancing customers' needs based on open/close times, time windows, and the customer’s value to the company versus overall route costs. Ensuring timely and accurate deliveries that meet customer expectations is essential for satisfaction, but it must be managed against the cost of fulfilling these requests. 

Effective customer service strategies include:  

• prioritizing high-value customers 
• optimizing delivery windows 
• using customer engagement technology to streamline communication and planning, ultimately balancing cost-efficiency with customer satisfaction 

Self-driving vehicles and robots are revolutionizing last-mile delivery by promising efficiency and cost savings. 

• Examples: Some companies deploy autonomous delivery robots for grocery and small parcel deliveries, reducing the need for human drivers. 

• Advantages: These vehicles can operate 24/7, significantly reducing labor costs and enhancing delivery speed. 

• Obstacles: Widespread adoption requires advancements in AI for navigation, public trust in safety, and infrastructure improvements to support autonomous systems. 

Drone delivery leverages unmanned aerial vehicles (UAVs) to reach areas traditional vehicles cannot easily access, offering significant potential in rural and emergency scenarios. 

• Applications: Some companies use drones to deliver medical supplies to remote areas, showcasing their utility in life-saving contexts. 

• Challenges: Despite potential, regulatory hurdles regarding airspace, safety, and noise pollution persist, particularly in densely populated areas. 

• Future Outlook: Advancements in battery life, automation, and regulatory frameworks could make drone deliveries more mainstream in the coming years. 

Hyperlocal delivery focuses on completing deliveries within hours, catering to businesses like food services, pharmacies, and ecommerce platforms that promise rapid fulfillment. 

• Efficiency: Advanced route optimization software and predictive analytics ensure deliveries are made quickly while minimizing costs. 

• Future Trends: With the rise of dark stores (mini-warehouses), hyperlocal delivery is becoming even faster and more reliable, enhancing customer satisfaction in competitive markets. 

Smart lockers offer centralized delivery points where customers can retrieve packages at their convenience, addressing common issues like failed delivery attempts. 

• Technology Integration: Lockers are often integrated with apps that notify customers when packages arrive and provide access codes for retrieval. 

• Benefits: They reduce delivery costs by consolidating stops and improve security by preventing theft. Smart lockers are especially useful in urban areas with high population density. 

• Scalability: Businesses can customize locker installations for residential buildings, corporate offices, or retail stores, making them adaptable to various needs. 

Sustainability has become a critical focus for businesses as they seek to reduce environmental impacts while meeting consumer demands for greener solutions. 

• Electric and Non-gas Vehicles: Companies are adopting electric delivery vans, e-bikes, and even solar-powered vehicles to lower carbon footprints.

• Bike Couriers: Particularly effective in urban areas, bike couriers reduce congestion and emissions while offering flexible, efficient delivery options. 

• Carbon Offset Programs: Some logistics providers offer carbon-neutral deliveries by investing in offset projects such as reforestation or renewable energy development. 

What does sustainability mean to consumers? Learn how it’s affecting their buying and delivery decisions in Descartes’ third-annual Home Delivery Sustainability Study. 

Businesses across various industries have unique last-mile delivery needs, driven by customer expectations, product characteristics, and operational constraints. Below are some key industries and their specific last-mile use cases: 

Ecommerce businesses rely on efficient last-mile solutions to deliver online orders quickly and reliably. Advanced routing systems and real-time tracking technologies help meet customer demands for same-day or next-day delivery, enhancing the overall shopping experience. 

 
Read success stories: Discover how Descartes' ecommerce customers are achieving success with our routing solutions—real stories, real results. 

Restaurants, bars, and grocery stores depend on precise, time-sensitive deliveries to maintain inventory freshness and availability. In food service and beverage distribution, temperature-controlled vehicles and optimized scheduling ensure perishable goods like produce, meat, and beverages arrive in peak condition. 

Read customer success stories: Learn how leading food service and beverage distributors are achieving transformative results with Descartes. 

The healthcare industry demands precision in the delivery of medical supplies, pharmaceuticals, and equipment. Last-mile logistics for this sector often requires adherence to strict cold chain protocols, compliance with regulatory standards, and rapid response times to ensure patient care. 

Delivering materials such as lumber, concrete, or roofing supplies requires advanced planning and coordination to meet time-sensitive project deadlines. Companies in building supply and bulk materials distribution use route optimization and load management tools to ensure timely and efficient delivery to job sites. 

Read customer success stories: Explore how building material distributors are improving their last-mile delivery. 

Retailers are increasingly shifting to home delivery models, providing everything from electronics to furniture. Customized last-mile solutions, such as white-glove delivery and assembly services, help enhance customer satisfaction and loyalty. 

Read customer success stories: See how retail and home delivery businesses are creating exceptional customer experiences with Descartes. 

Third-party logistics (3PL) providers and courier companies play a pivotal role in last-mile delivery by managing multi-stop routes, meeting tight time windows, and ensuring smooth handoffs between different transportation modes. 

Read customer success stories: Explore how transportation and logistics companies are overcoming their challenges by partnering with Descartes. 

Field service technicians and sales teams depend on accurate and timely deliveries of tools, equipment, and demo products. Last-mile field service and sales solutions ensure professionals can meet customer needs without disruption to their schedules. 

Read customer success stories: See how field service and sales teams are achieving streamlined communication and enhancing the customer experience. 

Waste management companies require last-mile logistics for efficient collection and disposal services. Optimized routes and schedules help minimize fuel costs and environmental impact while maintaining regulatory compliance. 

Wholesale distributors face complex last-mile challenges, delivering bulk products to diverse end-users, including restaurants, retailers, construction sites, and auto shops. Each delivery often involves unique requirements such as specific time windows, tailored unloading procedures, or navigating urban congestion. 

Read customer success stories: Discover the many ways wholesale distributors are achieving business benefits with Descartes’ solutions.

The last mile is more than just a final step—it's a vital opportunity to differentiate your business and create lasting value. By embracing advanced technologies, proven best practices, and tools that enhance customer engagement, you can not only streamline delivery operations but also strengthen customer relationships, reduce costs, and stay ahead of the competition. 

Take the first step toward transforming your last-mile delivery strategy today. Contact a Descartes solutions expert to discover how our innovative solutions can help you optimize performance, lower operational costs, and consistently exceed customer expectations.