We are starting to see fundamental changes in commerce. This includes the diminishing role of in-person retail stores. Where you have your distribution facilities, what kind of facilities you have, and how you use them are the most strategic questions you have to master if you want to master the last-mile logistics and delivery. The goal is short routes with high-capacity utilization
Last Mile Logistics is typically what is referred to as the last leg of transportation to the consumer. While last-mile logistics is just the shortest, final leg of the global supply chain, it’s the most complex and the highest cost. The final mile accounts for 40% of the overall supply chain cost, so that tells you how important it is to get that last mile right. It’s not about applying off-the-shelf solutions; it’s about having tailor-made solutions to the specific environment that you care about.
Over the past ten years, pure-play online retailers like Amazon have set the new standard of shopping with just a few clicks and a quick delivery right to customers’ homes. Former titans like Kmart and Austin Reid have been forced to file bankruptcy and make significant closures and layoffs.
Today, traditional companies have been forced to play catch-up. Often, these companies have adopted an omnichannel retail model which integrates their physical stores with online fulfillment operations but providing that kind of convenience can come at a cost of operational efficiency. This is particularly true when it comes to last-mile logistics / last mile
Last-mile logistics is especially challenging because of its complexity. Older models relied on economies of scale resulting from distribution centers shipping in bulk to various stores. Now, retailers that want to deliver directly to individuals are facing a brand-new set of problems. Small quantity purchases, irregular purchasing patterns, and missing delivery windows can all affect revenue to maintain efficiency. Another very common problem in last-mile logistics is a driver deviating from the optimal route that was planned for him or her.
Companies need to carefully consider their last-mile delivery supply network. This type of network that best suits a company will be based on that they of business. Last-mile networks can be categorized broadly according to two key dimensions – delivery responsiveness and product variety. Delivery responsiveness is important when customers need their orders fulfilled quickly.
Think of the same-day and on-demand options that are becoming popular for grocery delivery. Product variety plays a role in the type of fulfillment that will be possible. For example, companies with high product variety may not be able to maintain a complete inventory. Instead, these companies will stock a core product range and source the remaining products from other suppliers, including third-party sellers.
If customers are not in a rush to get their orders and you stock a very specific type of product, you can use a simple supply network with centralized logistics and time home delivery windows. If customers don’t need their orders right away but expect a large variety of products, you can use a one-stop supply network much as Amazon does. Logistically, this will be more complex because it will rely on a variety of supplies and inventory and logistics won’t be nearly as centralized.
When customers expect to get their orders quickly and expect a large variety of products, you’ll need to decentralize and go hyperlocal. This often means building a portal that can facilitate crowdsource deliveries. It is clear that today’s customers expect convenience and consistency across many channels. Solving the last mile delivery problem will be challenging but is also one of the most important ways that a brand can engage with customers and establish a reputation for great service.
There is not a one-size fit all solution to any given city in the country or world. The best solution for last-mile logistics in Dallas, Texas might look very different from the best solution for last-mile logistics in Los Angeles or Miami. That is where 3PL Bridge will bring national expertise to you. We will make sure that we find the perfect last mile delivery / logistics solution that is right for you and maximizes your efficiency.-
Your final mile logistics strategy needs to meet unique demands in order to satisfy your customers.