What is Last Mile Delivery?

Last mile delivery is the final movement of a customer order from a facility such as a distribution center or store to the end customer. Final mile deliveries are typically executed by parcel carriers, couriers, LTL carriers and private or dedicated fleets.

In many industries such as distribution and retail last mile delivery is an important part of the companies’ competitive strategy. The ability to quickly, reliably and precisely deliver to customers as well as provide value-added services such as dynamic delivery appointment scheduling can improve customer retention and increase revenue.

Dramatic increases in internet-based buying has increased the importance of last mile delivery as it is a significant part of the consumer’s overall buying experience.

Last mile delivery strategies, capabilities are rapidly evolving and becoming more important to financial performance and customer differentiation.

What was considered best practice two years ago is now common and distributors and retailers are using it for competitive differentiation and to increase revenue. Because last mile delivery capability and performance is so important to customers, distributors and retailers that do not keep up with best practices are at risk of losing any competitive advantage they may have and not maximizing their financial performance.

It’s not just the physical capabilities that are quickly changing, but last mile delivery technology and the use of the data it generates. Leading distributors and retailers are using technology and data to increase their delivery performance and offer more advanced delivery services.

The data is being used to transform the customer experience engaging customers from the time they select a delivery appointment during the buying process to post-delivery quality surveys.

There are four major challenges in last mile delivery. The first is delivering consistently. Keeping deliver time promises is extremely important to maintaining a good customer experience.

The second is keeping delivery costs down. Last mile delivery can be very expensive and delivery efficiency is important to be able offer the delivery services customer demand and not impact financial performance.

The third is delivery precision and responsiveness. Customers now demand tighter delivery window and shorter delivery lead times which is increases last mile planning complexity and coordination.

The fourth is providing value-added services during the delivery process. Value added services can provide a competitive differentiation and additional revenue, but they also add to last mile delivery complexity and coordination challenges.

Overcoming last mile delivery challenges are achieved through better planning and a more educated workforce that adheres to operational practices and policies. Planning that more accurately represents the real-world constraints and operational policies and practices combined with optimization technology that effectively models the last mile delivery goals can create routes that meet customer service objectives while maximizing financial performance.

Optimized planning can also address the complexity of shorter lead times, tighter time windows and value-added services. Delivery workforce performance can be enhanced through mobile technology that guides them through the delivery process, allows them to communicate their status to dispatchers and ensure that the right goods get delivered to the customer.

Drivers can be tracked to help ensure they follow route instructions, correctly capture proof of delivery information and are driving safely.

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