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Last Mile Delivery: The Definitive Guide

Last updated : September 2, 2024
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E-commerce has grown exponentially, meaning last mile delivery has become increasingly important for customers, but also more complex for fleet managers. This phase, generally the most expensive in the supply chain, represents a substantial portion of overall costs.

To meet growing customer demands and gain a competitive advantage, businesses and companies must refine their last mile delivery strategies. For fleet managers, optimising last mile delivery is now integral.

To assist you in navigating this area, we've created this guide to last mile delivery. Throughout, we’ll cover all the details needed to perfect your fleet’s delivery process.

What is Last Mile Delivery?

Last mile delivery refers to the final stage of the delivery process. It encompasses the operations involved in moving goods from a distribution centre to the final delivery destination, whether that is a personal residence, business address, or public pick-up point.

Why is Last Mile Delivery Important?

Last mile delivery is important because it is the touchpoint between a customer and a brand. While providing customers with the products they want is crucial, delivering a seamless delivery experience from start to finish has become paramount for fleet managers.

Reason being, that a positive last mile interaction enhances brand equity, whereas a negative experience can damage a brand’s reputation considerably. Effective last mile delivery management also establishes customer loyalty by ensuring on-time deliveries and offering conveniences such as same-day delivery and reliable ETAs, fostering repeat purchases.

How does Last Mile Delivery Work?

1. Order Placement and Fulfilment

The customer places an order online or through a mobile app. The retailer or logistics company receives the order, processes it, and prepares it for shipment at the warehouse or fulfilment centre. The fleet manager schedules the shipment for pick-up by a fleet vehicle.

2. Delivery Planning

When the order is ready for transport, the fleet manager assigns it to a driver and plans the route. The vehicle's route is optimised based on factors like distance, traffic, delivery time windows, and sometimes customer preferences to ensure efficient delivery.

3. Dispatching Deliveries

The fleet manager shares the delivery schedule, order information, and task list with drivers. The aim is to assign the most efficient route to each driver, considering factors such as time to destination, order priority, and any specific driver or vehicle requirements. The fleet manager makes sure that all drivers are briefed and ready for their routes.

4. Order Collection and Verification

Drivers pick up orders from a distribution centre or warehouse. The fleet manager oversees the loading process, ensuring that vehicles are loaded according to driver assignments. Orders are scanned before loading to update the system, enabling them to be tracked throughout the journey.

5. Delivery and Confirmation

The driver delivers the package to the customer's location. Upon delivery, the driver confirms the package's arrival, often by obtaining a signature, taking a photo, or using a GPS-enabled electronic proof of delivery system. The fleet manager monitors deliveries in real-time to ensure timely completion and updates the order status in the system to mark it as complete.

What are the Challenges in Last Mile Delivery?

  • Traffic Congestion: Heavy traffic can significantly delay delivery times, making it challenging for fleet drivers to reach customers promptly.

  • Limited Visibility: Tracking packages once they are out for delivery can be difficult, resulting in limited visibility for both fleet managers and customers.

  • Delivery Window Constraints: Meeting specific delivery windows requested by customers can be challenging, leading to missed deliveries and reduced customer satisfaction.

  • Cost Control: The final leg of the delivery process is often costly, particularly in urban areas where traffic and other challenges can increase delivery times and thereby fleet costs.

  • Unpredictable Demand: Managing the last mile can be difficult due to unpredictable demand patterns, leading to inefficient use of fleet resources and higher costs.

  • Security and Theft: Packages in the final mile stage are vulnerable to theft, resulting in significant financial losses for fleets as well as frustration for customers.

  • Environmental Impact: The environmental impact is significant due to emissions from fleet vehicles, posing sustainability challenges.

How Last Mile Delivery Software Offers a Solution

Last mile delivery is a vital part of the supply chain, essential for guaranteeing customer satisfaction and loyalty. However, it also presents several challenges, as discussed. Fortunately, technology provides an answer to these challenges.

Specifically, last mile delivery software can optimise routes, minimising delays caused by traffic congestion. It enhances visibility with real-time tracking for fleet managers, allowing them to better inform customers. Additionally, it improves cost management through better resource allocation and route planning, all while last mile analytics help manage demand patterns.

Furthermore, such software supports security by offering verification features, reducing the risk of theft. Lastly, by optimising routes and minimising unnecessary trips, last mile delivery software also lowers a fleet’s environmental impact, promoting sustainability.

Recognising the importance of software in last mile delivery, we at MICHELIN Connected Fleet have developed last mile delivery solutions that directly address common challenges in this final stage of the supply chain.

If you’re interested in efficiently managing delivery windows, ensuring timely arrivals, and boosting customer satisfaction, be sure to make an enquiry into our services today.
MICHELIN Connected Fleet

Written by MICHELIN Connected Fleet

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