Last mile delivery refers to the last stage of any product movement from the company’s warehouse to the recipients’ houses. The last-mile delivery is the most expensive & complicated process of the whole delivery process. It often includes its challenges, higher hidden cost, technological & transparency issues.
A few years ago, no one would have thought that it would be possible to deliver products on the same day the orders get placed. But thanks to the up-gradation of technological & human resources this seems possible & E-commerce companies are serving the last mile deliveries successfully.
We will discuss the challenges the companies have to face to deliver those products to their destinations.
Higher Fixed Cost
The prime hindrance to the last-mile delivery challenge is the high cost. Almost 30% of the total shipping cost is borne by the last-mile delivery challenge. Many eCommerce companies have now opened an urban warehouse or even in the remotest places to cater to the needs of such customers who want the same day or on-demand delivery of their products. Sometimes the high cost of last-mile delivery is passed on to customers themselves. Or, few inconsistent demands like a higher volume of purchases are needed to be done by the customers to avail of the service.
The companies like to deliver the products with minimal cost and zero loss. However, in the case of last-mile delivery eCommerce companies need to establish warehouse logistics, recruit permanent stuff & hire vehicles for temporary profit. So the fixed cost is higher in the case of last-mile delivery.
Efficiency Optimization
It is a very important factor to be efficient while packaging of products. Because it saves a lot of time if the details & address of the customer are put without any error or if these do not need any further correction. Also, fuel efficiency needs to be kept in mind while delivering packages to the doorstep of customers. In the case of last-mile delivery, these factors sometimes seem to be challenging and companies need highly efficient workers to serve the purpose of last-mile delivery.
Route Optimization
Route optimization is one of the most important factors while addressing the challenges of last-mile delivery. Because companies need to plan an accurate route to satisfy customers & decrease their variable costs. It is mentally taxing to plan the whole route by minimizing the variable costs, maintaining environment regulations & delivering the products on the same day.
Not just the constraint of variable costs. Routing optimization decreases the expected time of arrival of products, failing which leads to slipped or late deliveries that cause customer dissatisfaction.
Hidden Transparency
In the case of last-mile delivery the tracking of the products, most of the time is not available. Whereas, transparency of the tracking of the products has become an important element of eCommerce. Customers like to check their product location once in a while, but due to several constraints, it is not possible for last-mile deliveries. On the other hand, most of the customers even want to track the products in between the local warehouse to their doorsteps.
In Transit Unpredictability
It is hard to predict the obstacles that may come in the way of delivering the products to the doorsteps of customers from the local hub. Whether one calls it the act of God or the act of men, it happens 20% of the time, this is beyond the control of anybody. In this case, the company should reach out to the customers to inform the delay of their products & sort out any gained mistrust.
Friction
The type of goods matters a lot in the case of last-mile delivery & on-demand delivery. For example, fragile, toxic, inflammable & perishable goods take more time for planning & organizing the route, as well as the packaging. These types of goods add more challenges to the last mile delivery.
Customer Unavailability
Even after tackling such obstacles, when a delivery person delivers products to the customers’ doorsteps, the customers may be unavailable. It incurs more losses than earlier predicted costs. Because it includes fuel & delivery charges costs. The unpredicted cost is borne by the company.
Customer Nuances
Cancellation of products at the last moment, giving wrong or remote location addresses also adds the challenges to the last-mile delivery, which increases the loss borne by the company.
The last-mile delivery is the most crucial step in the journey of the products to the customer. At the same time, all the costs, complications, and unpredictable variations, it is admittedly the least profitable part for the eCommerce companies.
Last-mile can be an excellent opportunity for eCommerce companies if they make their services faster, transparent, and efficient. Not only this but by optimizing the last-mile delivery, the eCommerce companies can also cut costs, enhance the customer experience, and build their brand value.
The last-mile delivery is the most crucial step in the journey of the products to the customer. At the same time, all the costs, complications, and unpredictable variations, it is admittedly the least profitable part for the eCommerce companies.
Last-mile can be an excellent opportunity for eCommerce companies if they make their services faster, transparent, and efficient. Not only this but by optimizing the last-mile delivery, the eCommerce companies can also cut costs, enhance the customer experience, and build their brand value.
