What is the last mile: this is how logistics solutions work without which eCommerce would not make sense – Marketing 4 Ecommerce – Your online marketing magazine for e-commerce

In our online orders, logistics plays a fundamental role. When an online purchase of a product is made, the process is long and includes several phases. From the moment the package is prepared at the point of origin until that package reaches us at the destination point (our home or collection point), many things happen, and the challenge is to make this process as efficient and least expensive possible.

Because to this is added that users have become accustomed to shipping costs being free in most cases and also, we want to receive our order as soon as possible. This thing of paying almost €4 for shipping costs and having to wait 3 weeks to receive it, no longer takes. And if it happens, it usually affects the user’s assessment of the shopping experience, negatively affecting the perception of the purchased product and the company that sells it.

Due to its importance, in this article we want to investigate the last mile management, see its critical points and how it is trying to improve and innovate in this regard to make this part of the process more efficient.

what is the last mile

the last mile is package transport management focused on the last route to be made in the final delivery. It corresponds to the route that is made once several packages have been grouped in a certain place and from there they are distributed in the corresponding city. For this reason, it is also known as capillary distributionbecause within a city deliveries are made in different zones or branches.

Last mile management varies depending on the characteristics of each logistics chain. In production logistics chains (B2B)For example, the last mile covers the supply of components necessary for a production process (for example, screws that will be used in the assembly line of a company dedicated to the manufacture of automobiles). In supply chains focused on final consumer and retail sector (B2C)the last mile consists of direct delivery to the customer either in a drop-off/pick-up point, an automated locker or at your own home. This second case is normally generated after a purchase in an online store (eCommerce).

In addition to being a key factor in buyer satisfaction, as we will discuss below, handling the last mile is the most expensive and complex part of the shipping process.

Challenges and difficulties of the last mile

As you can imagine, with the rise of eCommerce and the rhythm of both personal and professional life that we lead, the last mile faces notable challenges and difficulties. Focusing on the eCommerce field, let’s remember for a moment the last online order we made. Our package, from the moment it is prepared until it arrives at our house, goes through a long process in which it encounters several obstacles and, moreover, it must arrive as soon as possible and cost me little (or even nothing) so that I am satisfied and consider that the service has been positive.

The difficulties of the process vary in each case, assessing key aspects such as the following:

Package type: its size, if it has any special condition (is it fragile or is it a refrigerated food, for example), type of vehicle needed to transport it (being able to use anything from motorcycles to trucks), space it occupies, assessing whether it is feasible to transport it together with other packages or must transport only, etc.
Delivery conditions: The delivery time agreed with the client must be taken into account, as well as its cost and other variables that may affect it. This takes on special importance on important dates such as Christmas, for example, in which there are a large number of orders and users are also very strict with the date since many orders are gifts that they want to give on a specific date. In addition, regarding the cost, users are increasingly reluctant to pay for shipping as they are used to services such as Amazon-Prime or free shipping for low purchase minimums. This aspect is influenced by many variables: if the delivery is in a rural or urban area, the traffic on the route, the accessibility to the delivery area, the cost of the journey, if you can take advantage of that route to deliver more than one package, etc.

Linked to this previous point, it should be noted that One of the most widespread and common difficulties is finding the user at home. How many times have you placed an order online and when the courier called you you were not at home? How many times have we been waiting for our package by the locator that the courier company sends us and we get pissed off when we see “your order could not be delivered”?

This common occurrence makes this final management of the process difficult and often affects the customer’s perception of the order and even of the online store where they bought. And the icing on the cake, let’s not forget, is the returns that they may have, which have an impact on a critical cost for companies since, in addition, that order will be returned and will not be charged.

The last mile during lockdown

During confinement, logistics has played a key and complex role due to the rise of eCommerce linked to the closure of physical stores decreed by the government. The CEO of , Alberto Navarro, assured that the growth of electronic commerce during confinement has been exponential, reaching levels of the Christmas campaign at a time of year that, in general, usually registers normal levels of activity. In addition, it should be noted that the above, so the effect of “the first time” of these consumers comes into play, which must be taken care of.

In fact, linked to the management of the last mile in a situation as exceptional as the current one, a few days ago we told you that reaching almost a million negative ratings, more than double the usual number. Most of these reviews were linked to problems with the delivery of their packages.which was the most common cause of consumer discontent.

Last mile startups

Beyond the last-mile solutions offered by large parcel groups, in recent years we have seen a boom in startups that focus on this phase of the logistics process. Companies like Citibox, Scoobic, Stuart, Paack or Revoolt They stand out in Spain for their proposals. But we will talk about them in detail in another article 😉

How to optimize the last mile

Given the importance and challenges of managing the last mile, much focus is being placed on optimizing this part of the delivery process in order to make it more efficient. The sector is rethinking the current distribution system and many options and alternatives are being evaluated. Some of the aspects in which greater focus is placed are the following:

transportation routes. It will be necessary to optimize the routes that are going to have to be carried out in the distribution of packets so that they are as efficient as possible. We will have to consider several factors such as traffic or possible traffic jams, closed streets or difficult access, works, etc.
The types of parcel and transport. The size and special requirements of the packages to be delivered will also play a role. We will have to try to make the most of the space and we will have to consider which packages are fragile, which package contains food that needs to be refrigerated, etc. This will also influence the type of vehicles that we have to use since using a motorcycle is not the same as using a truck. Fact that will also influence us in the personnel to hire.
The terms of delivery. The time of delivery, as we have mentioned, is also key. We will have to take into account how we should deliver the package and at what time. In addition, it will be necessary to ensure in advance, whenever possible, that the user is at home at the time of delivery or, if he is not, we will need to look for alternatives to see when we have to return, trying to avoid unnecessary travel.

Solutions and alternatives to traditional delivery

Some of the solutions that are being evaluated to deal with traditional delivery to consumers’ homes are the following.

agreed deliveries

This case is simply agree with the buyer a day and time of delivery in advance to avoid unnecessary journeys. Thus, we ensure that the user is at home and we do not make failed attempts that result in frustration for the buyer and cost for the delivery company. This seems simple but we must bear in mind that the schedule, again, is usually a problem. The time slots offered are not always the necessary ones and the availability that we thought we were going to have a few days before, may not be the real one when the time comes.

smart lockers

This option is becoming very popular and it is increasingly common to see these lockers in ccommercial centers or large establishments as well as on the street or in large blocks of flats. In this way, the consumer knows that his package will be waiting for him at the agreed point and that he can pick it up at the time that suits him.

In addition, a follow-up is usually offered to the consumer so that they know at what point the package is and when it is already available for collection. The only inconvenience here is that the user has to go to the smart locker of their choice, but they have greater autonomy. At the beginning of the year, for example, . Another of the large networks of automated ticket offices are those of , or one of the first to be used on a large scale, .

Collection or convenience points

It is one of the solutions that is currently being used the most. Most logistics companies already offer this alternative. The collection or convenience points are made up of a business network (physical establishments) that serve as delivery and pick-up locations for packages. It is usually a wide network to facilitate the user’s choice and they offer a wide opening hours and many of them even open during the weekend.

The use of drones to make deliveries

Companies like DHLExpress It already uses drones for delivery in China. They explain that “the air route overcomes the complex road conditions and traffic congestion in urban areas, . It allows them to reduce the delivery time from 40 minutes to 8 and the cost by up to 80%.