The last mile delivery stage is a critical part of all effective supply chain and logistics strategies. While it is unfortunately one of the costliest steps of any delivery, it’s also an essential key to customer satisfaction. It’s also one of, if not THE most difficult elements of supply chain management to get right, with many companies failing to do so.

Understanding last mile logistics is only half the battle. With the ever-increasing rise of shipping related costs, in large part due to major carriers raising their rates and surcharges exponentially, it’s never been more important for shippers to reevaluate their existing last mile logistics processes and implement more efficient and cost-effective last mile logistics strategies that align customer and business expectations. This is absolutely key in order for shippers to maintain their position in the marketplace while continuing to provide products to their customer bases as quickly and cheaply as possible.

Here are 9 key points that any shipper should always consider when they do decide to analyze and optimize their last mile logistics strategy:

1. Planning Is Essential

Proper planning is a MUST in order to create an effective last mile delivery strategy. Shippers should routinely evaluate current last mile logistics strategy processes and put plans in place for managing the optimization of current systems as well as the adoption and implementation of new last mile logistic strategies that are more cost-effective and efficient.

2. Leverage the Right Technology

One factor to always be aware of when creating a last mile logistics strategy is cost. According to Mitchell’s NY, the last mile is seen as the least efficient leg of shipping, and on average it accounts for up to 20% of the total shipping cost of any product. Last mile delays and issues during delivery can eat up fuel and time and seriously devalue a brand. But today shippers can leverage technology, such as Big Data, to make small but effective changes and improvements to their last mile logistics processes.

Shippers considering implementing or upgrading technology to meet last mile logistics demands should also consider ease and speed of implementation prior to making any such decisions. E-commerce markets move at the speed of light, and unnecessary delays could result in customer losses.

3. Analyze Everything

Nothing should be off the table when considering an effective last mile logistics strategy and implementation. Shippers should analyze everything from the biggest to the smallest possible influencers that could affect their final mile delivery in any way.

4. Manage the Entire Last Mile Delivery Process

Shippers must manage the whole last mile delivery process to maintain effective last mile logistics strategies. This includes aspects such as the driver, the shipment, the trucks, the technologies used to track progress, online platforms and consumer devices. Obviously, shippers cannot track what consumers use their personal devices for all the time, but they can use metrics and Big Data to track how visitors behave on their respective e-commerce sites.

5. Be Customer-Centric

Any effective last mile logistics strategy must be focused on the end customer’s needs; the term ‘last mile’ itself refers specifically to the process of delivering a product to the end user. This is the cornerstone of all modern logistics strategies, regardless of whether it is direct to consumer or business-to-business sales. While many may see cost as the most critical element of last mile logistics, in the long run it’s always more costly to lose the business of a loyal customer.

6. Think Outside-the-Box

According to PigeonShip’s VP of Business Development Tony Jasinski, businesses today must understand that “…traditional standards of delivery do not work effectively in modern last mile logistics strategies anymore. Companies must think of unconventional solutions to meet last mile delivery demands, like PigeonShip, Uber, Instacart or Deliv.” These app-based last mile logistics providers are of course disruptors, but they can enable shippers to meet growing customer demands and expectations for faster, tighter delivery windows.

7. Measure Performance

Amazon sets industry standards for last mile delivery, reports the Supply Chain Game Changer, and the e-commerce giant’s free shipping services, otherwise known as Amazon Prime, highlights why shippers must measure performance.

With about 6 percent of consumers in the US willing to pay for same-day delivery, plus 28 percent of online shoppers willing to abandon their shopping carts due to perceived excessive fees, shippers cannot afford to forgo measuring and analyzing performance. Performance measurement goes back to cutting costs wherever possible, without sacrificing quality or service. Quite the contrary, performance measurement when done properly and used to make informed decisions utilizing actual data will almost always lead to improvement across the board.

8. Manage Returns Thoroughly & Effectively

Managing returns and reverse logistics are another consideration in creating an effective last mile logistics strategy, reports Industry Week. Retailer differences in SKUs and returns options for both e-commerce and brick-and-mortar store purchases can complicate the issue.

As a result, shippers should consider the form, function and placement of inventory, including inventory coming in from reverse logistics channels, in their entire warehousing and distribution network. This will ensure the company has product, even if it is refurbished or returned product, available nearest to consumers.

9. Location. Location. Location

One of the final considerations goes back to how quickly a product can be mobilized and delivered. It goes back to the location of the product and the location of consumers. With consumer’s expectations so high regarding delivery times and costs, shippers must create robust last mile logistics strategies that shrink the distance between warehouse and consumer.

This might include using stores-as-distribution-centers, increasing warehouse capacity, or even locker-pickup systems. Ultimately, shippers that reduce this distance as much as possible, and through as many means as possible, will be able to create a tighter and more effective last mile logistics strategy.

What’s Next From Here?

After crafting an effective last mile logistics strategy, shippers come to one ultimate conclusion. They need to revamp the technology and processes used in managing both overall and last mile logistics. Moreover, last mile logistics is key to reducing overhead and improving customer service.

As a result, more shippers will turn to technology and newer transportation management systems (TMS) to aid in the efficient execution of the last mile. Whatever the eventual answer, if planned and executed properly while keeping in mind the key points outlined above, a well-crafted last mile logistics strategy will help shippers stay competitive and profitable in today’s ever-changing market conditions.

Contact Us to find out how PigeonShip can help as a part of your own last mile delivery process today!

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