In the supply chain, the last mile is considered to be the most expensive, inefficient and pollution generating segment because of-
“Not at home” recipients results in high number of failed deliveries- This results in extra-cost, distance traveled & emissions.
As some goods that require specialized handling falls into attended delivery category and result in the largest number of delivery attempts, which is a major cause of skyrocketing costs for last mile logistics service providers.
“Empty running” increase due to Consumer deliveries- Multi-drop loads almost by necessity result in an empty leg as they return to the depot.
Due to low density there is a difficulty in executing a profitable and efficient routing plan- For home deliveries in some regions, the level of consumer density may be poor, leading to increased transit time and additional cost.
Some of the tactics being utilized, either individually or in combination with other means:
- Consolidating and de-consolidating shipments.
- Shift freight between truckload and LTL carriers or from LTL to truckload carriers, depending on needs.
- Truckloads split up and shipped as partial truckloads or LTL to last mile distribution centers.
- Consolidating online orders into truckloads and moving goods closer to final distribution points for de-consolidation and delivery.
- Changes in origins and destination pairs.
Consider These Factors When Implementing Innovative Strategies for Last Mile Logistics
- Service levels (time windows, delivery frequency and options, maximum lead times).
- Security and type of delivery (attended vs. unattended).
- Geographic area and market penetration (density of the region/market; distance between points of reception; percentage of the number of goods which can be clustered during delivery routes.
- Fleet and technology (vehicle size and types, RFID, GPS, SMS, routing software, etc.
- Environmental impact (pollution, energy cost and waste).
The need for last mile logistics providers has gradually increased due to the growing expectations of consumer for fast and free delivery and the usage of omnichannel retailing.
The supply chain industry is in a state of flux. New business models, emerging technologies and collaborative measures using crowd sourcing apps and software are being utilized in order to-
drive down shipping costs, provide more flexible delivery options, enhance customer and merchant satisfaction and increase the efficiency and speed of last mile delivery service.