Logistic business
Last-mile delivery and other trends In order fulfilment
May 25, 2022
The advent of online shopping has made acquiring desired items more hassle-free; however, this convenience comes at a price as logistics companies have to find new and quick ways to deliver these items.
Currently, Order Fulfilment is the backbone of the eCommerce industry, and this process begins when a customer places an order and ends when the purchase reaches their doorstep.
Retailers and logistics companies consider the final stage of this process to be the most significant and expensive part, and it's called "last-mile delivery."
In this article, you'll learn about last-mile delivery, how you can use it to optimize order fulfillment and other trends in the delivery process.
The last-mile delivery is the final phase of the delivery process, where the product reaches the final consumer's house from a transportation hub or warehouse. This method aims to deliver items to the customer while minimizing company expenses quickly.
This phase of the delivery process is essential to the eCommerce industry as customers can switch retailers and even products if delivery options don't meet their expectations. However, this factor is relatively problematic to retailers and logistics providers since last-mile delivery takes 50% of total costs.
The financial implications of last-mile delivery make optimization and cost minimization essential.
Some additional problems exist with the final phase of the delivery process, with the independent shipping carriers carrying the package from the warehouse to the customer. During this process, the speed of completion is dependent on several factors, and these include:
Unfortunately, the problems with the last-mile delivery are outside the company's control, with each element having varying consequences.
For example, delivery with higher daily orders may have items picked up from the warehouse multiple times a week or day; however, a smaller company may only have a few pickups every week.
Another prominent factor is rural areas where delivery routes are longer and with fewer stops far apart. Furthermore, the cost associated with last-mile delivery has worsened, especially with the recent free-shipping movement.
Customers are reluctant to pay for the product's delivery, forcing retailers to foot the cost themselves.
With the eCommerce industry rising and evolving rapidly, it's crucial for retailers and third-party companies to adapt to changes quickly. This flexibility requires staying up to date with the latest industry trends that can help optimize their order fulfillment process.
Below are some of the current trends in Last-Mile Delivery:
With the internet offering faster access to products, customers want the same delivery speed after purchasing the product. This demand for speed has resulted in the popular two-day, one-day, and even same-day delivery.
To tackle this requirement, third-party logistics providers rely on warehouse management applications to optimize order fulfillment processes. While this software is efficient, it still possesses some limitations.
Nevertheless, most companies that offer this service, such as pharmaceuticals and food/meal delivery, do so out of necessity, and the standard option presents irreconcilable detriments.
Upselling is popular strategy retailers employ to make more money, but the idea of incorporating this same system into the delivery process is a new trend.
This is possible via predictive intelligence technology; companies can anticipate what products a customer desires and make that suggestion during the checkout process.
Similarly, delivery drivers can stock their vans with items that customers regularly ordered in the past and might need, allowing the customer to receive their order before it's completely processed m
This model is practical in essential industries like food and pharmaceutical companies where people have reoccurring purchases associated with a particular order or time.
Tracking one's purchase is an essential feature for customers that want quick delivery as it reassures them of the expected time frame.
Fortunately, improvements in technology have made it possible for shipping companies to offer more efficient tracking information. Drivers can provide proof of delivery when the product arrives at the doorstep.
While this method is effective, the challenge is when regional and local last-mile delivery companies have to collaborate with national carriers. However, smartphones are tackling this problem as their GPS technology improved the standard of traceability.
Currently, several tech companies are presenting new methods for improving shipping efficiencies, such as drones, driverless vehicles, and robots. However, further tweaks are needed before full implementation as one of the current challenges is getting the item into the hands of the AI-operated delivery machine.
Nevertheless, companies like Amazon perform most of the transportation operations before the customer buys the product, leading to a shift in inventory management.
One example of this method is Amazon's use of artificial intelligence to determine when many orders are placed in specific regions and pre-ship these potential orders to local warehouses.
Technically, the most effective way to increase delivery speed and reduce time is to raise the number of fulfillment centers and warehouses in specific locations. This method works best in major cities and is a common strategy employed by Amazon Prime to complete their two-hour delivery option.
Other companies have begun using this method to their advantage by raising the number of urban warehouse spaces, which allows them to fulfill orders faster and even offer same-day or next-day delivery.
In reality, the solution to the last-mile delivery challenge varies based on company size, order type, and location. In some cases, an eCommerce store or third-party logistics company can combine improved technology and analytics and find that it solves the problem of rising delivery costs.
However, irrespective of your order fulfillment strategy, optimizing the last phase of your delivery process is necessary to save cost and time and improve customer satisfaction. Fortunately, employing the trending retail delivery solution may be the best first step to rectification.
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