Each year 9.84 billion parcels get moved throughout the world. This amounts to substantial costs for businesses.
One significant contributor to this cost is the final mile distribution. This last leg of the distribution process poses some significant challenges.
We’ve created the ultimate guide to help shippers better understand the challenge they are facing. We also provide some solutions. That way, shippers can face their final mile dilemma head-on.
Keep reading to optimize the distribution of products to customers.
What Is Final Mile Distribution?
When looking at the distribution process, the final mile is the last leg of the product’s journey from the warehouse to the customer’s doorstep. The point at which the package arrives at their door.
This last phase of the shipping process is the most expensive and time-consuming part of the entire shipment process. But it is also the key to achieving customer satisfaction.
The Last Mile Struggle
Think about the journey a product makes when it is ordered. The package seems to move right along. Then it gets to the local distribution center and says out for delivery. Then all progress seems to stop, and it took forever to get to the final delivery address.
That is the final mile inefficiency. The struggle here is that there are many stops and very few drops at each stop. Every time the truck stops, it takes up more time, which delays the delivery further.
Then there is the struggle of more rural areas. Then the drop points are even further apart. It could be several miles between each delivery.
Urban areas aren’t much better, though. What they make up for in close proximity, they lose in traffic congestion. So while the truck may not have to drive far, it will make slow progress.
Another significant problem is the increased volume of deliveries. The more people shop online, the more packages that need to be delivered. This means more stops and increased delays.
Another challenge to the final mile is the increase in customer expectations. Customers expect free and fast delivery these days. This makes fast final mile delivery even more critical.
Costs of Last-Mile Delivery
When the total cost of shipping is broken down, the final mile costs are significant. When that couples that with the rise of free shipping, it means substantial shipping costs are now bogging down the bottom line.
Solutions to Making Final Mile Delivery Affordable
Now that we know the challenges that companies face, we can discuss some possible solutions. Each one addresses at least one of the two major pain points, time, and expense.
When companies crowdsource, they use the power of the people to get their shipments moved. Think of it as the Uber of package delivery.
This method can reduce the cost of multiple delivery attempts by allowing their customers to schedule specific delivery times.
They will also save money by not having to hire full-time delivery staff as these couriers are independent contractors. The only downside is that they have increased risk as they have to depend on many different people to provide reliable and consistent service.
Professional Local Courier
If crowd sourcing sounds like its own logistical nightmare, then working with a single professional local courier may be more appealing. Local courier services focus on providing comprehensive coverage for a specific geographic area.
By working with a single courier, a business can be confident of fast and consistent service. That way they can save money and provide their customers with fast, reliable service.
Route Mapping Software
This software allows businesses to plan out deliveries in the most efficient manner possible. Planning the right route can help them avoid unnecessary delays. It can also allow their drivers to prevent backtracking and driving in circles, which only wastes time.
Local Brick and Mortar Distribution Centers
If a business can get their product closer to the customer before they order it, then they can get it to them faster when they do. Consider placing physical distribution centers that are geographically close to their high order volume areas.
Now, when a customer orders, instead of shipping across the country, they are shipping across the state. This can take their shipping down from a week to a day or two.
Businesses can use smart technology to make their shipping process more effective. For instance, they can track package temperature, location, and weather conditions.
They can use this data to better plan their shipping routes. This way they have more streamlined routes which will get their packages delivered faster.
A company can use data analytics to optimize their system. This is the information they will use to determine where they should put a localized distribution center or any other options for making the delivery process more streamlined.
Looking at delivery times is a good place to start. Track the delivery locations through GPS data. Also, pay attention to seasonal changes in order volume.
The future is promising for innovative ways to make final mile delivery faster and more affordable. This includes drones and autonomous cars.
These solutions will make delivery faster and reduce the expense of having a human workforce.
Try Out Last Mile Services Today
If you are looking for a way to reduce your shipping costs and time, then trimming your final mile distribution is the answer. This one leg of the journey represents a significant part of the shipping cost.
Look into alternative options such as local couriers. Or you can use technology to your advantage and plan better for optimized delivery routes.
Request a quote for your final mile shipping needs today.