Everything you need to know about last mile logistics

Everything you need to know about last mile logistics

Of all the processes that make up the logistics chain when it comes to electronic commerce, there is a really problematic point both for online store owners and logistics providers: The ‘last mile.’ It is, basically, a stretch of just a few miles in which the greatest difficulties occur, and efficiency usually gets critical, and this, of course, affects the customer satisfaction and the reputation of any distribution company.

When we talk about the ‘last mile,’ we actually mean the final process of delivering the order from an online store to the buyer. This step, which runs from the time the package leaves the last distribution point (the warehouse, a store, or any other distribution center) until it arrives at the place of delivery. It is the last step of the entire distribution chain, and in fact, it is the most fundamental. However, and unfortunately, it is in which more problems occur. There are several reasons why this is so troublesome, but the most common are the following.

First of all, the last phase of the distribution is almost always carried out in urban areas, and this means mobility problems in general: traffic, large jams at rush hours, pedestrian streets, lack of parking zones, wrong addresses, etc. Secondly, the transfers are usually inefficient since, in the majority of cases, they consist of delivering small packages. Third, the process must be completed in a short space of time in order to meet the commitments of time and delivery promised to the customer in the purchasing contracts.

For these reasons, among others, this is the most expensive and inefficient process and the one that causes several environmental impacts of the entire logistics chain, by the way. It is estimated that transport accounts for about 20% of the carbon dioxide (CO2) emissions accumulated in the atmosphere.

A correct transport management is an essential element for an optimal operation within the supply chain and logistics in general. In recent decades, there has been a considerable increase in the complexity of commodity exchange. New logistics systems have been constantly evolving, and the basic need is to make the transportation faster between the various basic links of the supply chain.

If you take a look at the schematic of a simplified logistics chain, in fact, only the last two operations (distribution and dispatch at points of sale) are those that take place at a local level. Distribution platforms tend to fit within a metropolitan area which is usually located on the outskirts of large cities, and sometimes several miles outside of them. The fourth link is given by the long-distance transport operator, which, logically, corresponds to a regional or national dimension. Finally, the manufacture and consolidation of the merchandise in stores can also be considered within a national or international terrain, depending on the origin of the merchandise.

Of course, there are other relevant activities such as the transit and storage of goods within the city, or the inventory management of the different consumer goods of its inhabitants, as well as operations that also add value and are linked to planning (or to marketing,) and they also require the execution of optimization techniques to make supply chains more efficient. These not only bring benefits to clients but also impact on the sustainability of the economy and employment.

Read also: Some useful tips to start a logistics company, by David Kiger

Without a doubt, obstacles related to urban mobility are often unforeseeable: There will always be situations beyond your control. However, there are situations that can be solved with a proper planning. Only twenty-five percent of companies consider that they are prepared to meet the demands of e-commerce logistics, and this is a widespread problem. If this is your case, you could start, on the one hand, by optimizing your delivery routes. This planning involves designing distribution routes previously, allowing the avoidance of critical points, and, at the same time, covering the largest number of distribution points in a short time.

On the other hand, you can start looking for light commercial vehicles, agiler to move between urban areas. The trend in logistics will lead us all in the coming years to necessarily use electric or hybrid vehicles, much more efficient and ready for delivery. Finally, you should implement alternative delivery methods, such as ‘click and collect’, which is certainly economic and ecologic (in fact, around 70% of online stores already have physical collection points where customers can go for their purchases.)

Image courtesy of ccarlstead at Flickr.com

On your priority list, transportation costs should be paramount if you want your supply chain to be more efficient. For this reason, it is important to keep up to date on the latest transport trends and constantly innovate. It is inevitable: The only way to reduce inefficiencies (and even eliminate them completely) is through an adequate investment in technology and knowledge. Solving this indeterminate (but limited) amount of problems that occur in the last mile requires infrastructure, right decisions, and a tremendous coordination effort between the public and the private logistics sector.

Recommended: Last Mile Logistics: Key to Competing in the Retail Race

* Featured Image courtesy of Joey Lu at Pexels.com

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